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The EU and the Mediterranean: Is an “Us” versus“Them” situation inevitable?Alejandro V. Lorca aa Professor, Jean Monnet Chair, at the Universidad Autónoma de MadridPublished online: 29 Apr 2008.

To cite this article: Alejandro V. Lorca (1996) The EU and the Mediterranean: Is an “Us” versus “Them” situation inevitable?,The International Spectator: Italian Journal of International Affairs, 31:3, 51-69, DOI: 10.1080/03932729608456747

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THE INTERNATIONAL SPECTATORVOLUME XXXI, No, 3, July-September 1996

The EU and the Mediterranean:Is an "Us" Versus "Them"Situation Inevitable?

Alejandro V. Lorca

Alejandro V. Lorca is Professor, Jean MonnetChair, at the Universidad Autónoma de Madrid.1

The global and interdependent nature of the world economic system makes itimpossible to analyze a country or even an area today without referring to thesystem as a whole. Consequently any attempt to analyze an area—to explain itsrole and behaviour as well as to predict its future—is a difficult task which isdoomed to fail unless its relations with other areas are taken into account.

Convinced of this hypothesis, the author would like to propose a coherentexplanation as regards the Western Mediterranean area. Inevitably one mustbegin with an overview of the world economic system. The three levels of analy-sis that will be presented here are those of the world economic system, thesubsystems composed of blocs and the territories-borders of such blocs. Thesethree levels of analysis must be related to each other, although circumstancesdo not always make this possible.

Although the subject of this article—relations between the European Unionand the Western Mediterranean countries, especially the Maghreb—is relativelyconcrete and geographically clearly defined, it does not appear to be equally welldefined conceptually. Firstly, neither the implications of global interdependencenor the limits of geographic boundaries are clearly defined. Secondly, even whenconcentrating on economic aspects, it is more difficult to separate the economyfrom politics and culture in the Mediterranean than in other areas. These arecircumstances which invariably complicate the treatment of economics in theMediterranean area. The fact that the Mediterranean serves as a border to the

1 This article is a revised version of a paper presented at the international conference on "Economy,Politics and Security in the Mediterranean", held in Turin, 26/27 September 1995 and sponsored by theAgnelli Foundation. The author would like to thank the Agnelli Foundation for its financial support.

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south of the European Union makes the situation even more complex, not onlybecause of the "neighbour effect" but also because of disruptive factors such asNorth-South economic factors, Western-Islamic cultural differences and demo-graphic trends.

It is not easy to write about the Mediterranean area. It is not easy to writeanything new about the Mediterranean area, and it is even more difficult to makecomprehensive statements about it. One could go so far as to say that only themost important researchers have produced anything interesting on the Mediter-ranean area. And some works, like those of Fernand Brandel, are much betterthan others.2

The reason for this is that a multidisciplinary approach is essential in dealingwith the Mediterranean. Economics, geography, history, politics, culture, religionand many other factors have intertwined in this sea area which was a closedsystem for centuries. This is a place where three continents meet. It has beenthe source of several cultures, one of which—the Western culture—has domi-nated the world for three centuries. The Mediterranean provides a strategic searoute adjacent to the Gulf of Arabia and the Caspian Sea, where about 75 percentof the world's commercial oil reserves are found.

It is not easy to write about the Mediterranean because authors are obligedto speak about the Arab, Turkish, Israeli and Western cultures from their owncultural perspective. This type of analysis and evaluation is not only difficult andsubjective, but always open to accusations of a geocultural—in this case, Euro-centric—bias.

Economic publications on the Mediterranean area are for the most partstrictly based on technical aspects linked to economic theory. Most of the booksand articles make free use of geographic models, mathematical symbolism andfigures. These publications are, however, determined by fashion and the require-ments imposed by economics departments on their researchers. Like many otherthings, both good and bad, these norms come from the United States.

This focus will not be used in this article, rather, the problem will be con-ceptualized in the first part of the article. A specific and varied view of the presentsituation as well as some figures will be given in the second part, while the thirdand conclusive part of the article will offer some considerations for the futurecourse of relations between the EU and the Mediterranean area.

The World Economic System

Since the beginning of the sixties, dynamics in the world system have led to theconfiguration of what is known as economic blocs. The success of the EuropeanEconomic Communities, now the European Union (EU), has been one of thecauses of this phenomenon. One way of describing this system is with the

2 F. Brandel, El Mediterráneo y el rnundo mediterráneo en la época de Felipe II (Mexico City: Fondode Cultura Económica, 1953) and "El Mediterráneo", Colección Austral (Madrid: Espasa Calpe, 1987).

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"Triones" concept.3 The "Triones" are currently constituted by three blocs, lo-cated on different continents, since they need room to be able to survive eco-nomically. On the American continent there is the North American Free TradeAgreement (NAFTA), in Europe the European Union (EU), and in Asia a some-what amorphous conglomerate which will be referred to as the "Asian Associa-tion" (AA). Japan is presently the economic leader of this last group.

Each "Trione" has a different internal political and economic structure. Saidstructures are influenced by the cultures, history and undoubtedly also the lead-ers of the countries composing each of them. NAFTA is a purely economicproject, with no intention of attaining more than the first stages of economicintegration in a free trade area; there is not the slightest interest in pursuingpolitical unity, which would in any case be very difficult to imagine. The EU is inan advanced stage of economic integration and is faced with a decisive stepinvolving Economic and Monetary Union (EMU). The EU strongly supports thecall for political integration. The AA, not yet formally constituted, is faced withpolitical instability on a continent where several countries are vying for hegem-ony. Japan, China, India and Indonesia will undoubtedly compete for control ofthis continent, sooner or later, indeed, these countries have strengthened theirnavies, which will represent the key to control of the Pacific in the future. Onewould hope that this struggle will not follow the same course of action as did asimilar struggle in Europe in the 20th Century.

The end of the Cold War has meant an official end to a bilateral world basedon two superpowers—the United States and the Soviet Union. This bilaterality,principally of a political nature, was based on ideological conflict. While economicbilaterality had already disappeared by the late seventies/early eighties, it wasthe end of this ideological conflict which led Francis Fukuyama to announce "theend of history" in Hegelian terms.4

The end of the ideological confrontation is precisely what will give the"Triones" a decisive role in the world economic system. Two military powersbased on two conflicting ideologies no longer exist. Ideological differences havedisappeared on a political level; pluralistic democracy has reached all parts ofthe world. Economically speaking, the market system has replaced a state-con-trolled planning system, which disappeared with the dismantling of the SovietUnion. But this does not mean that economic and political systems have becomehomogeneous. On the contrary, very marked differences exist with respect to thedesign and functioning of the interplay of market forces. As Albert points out,5

there are three different interpretations of capitalism. Each "Trione" is based ona different interpretation of capitalism, and these interpretations are at the root

3 A. Lorca "3T + 2R + 3M", Working paper no. 32, Centro International Carlos Quinto, UAM, Madrid,1986. Epsilon, Zeta and Eta, known in astronomy as the Triones, are the three stars that "pull" the"plough" of the Ursa Major constellation.

4 F. Fukuyama, "The End of History?", The National Interest, Summer 1988.5 M. Albert, Capitalisme contra capitalisme (Paris: Editions du Seuil, 1991).

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of conflicts in international markets. In an economic system of such a globalnature, competition imposes improvements in productivity, cost reductions andtechnological advances. This is where the confrontation among the "Triones" ishardest felt. The most efficient system will, inevitably, control the markets.

The author agrees with Fukuyama when he states that violent conflictsamong the "Triones", which he calls the centres of economic power or simply"cores", have ended. Military conflicts have been replaced by economic conflicts.The ruling powers, the nation-states—international participants par excellence,at least today—no longer need geographic territories on which to base theirpower. All they need are markets in which to increase their exports and, in doingso, their impact abroad. Logic tells us that armies are no longer necessary, asthere are no territories to conquer. A flexible and efficient national system ofproductivity is what is needed. The "Triones" concerned with maintaining systemsof productivity will therefore attempt to avoid violent conflicts. Furthermore, theuse of modern weapons systems makes such conflicts increasingly costly botheconomically and politically; the latter is due to the high loss of human life thatweaker parties can still inflict on the stronger, which find the impact difficult tobear at the domestic level.

Economic-conflict, which is not new, is more virulent today. The difficulty ofrecent GATT negotiations and the frequent appearance of protectionist trends inall areas of domestic politics are clearly a consequence of the uneasiness feltby national participants contemplating the international economic scene. Newconcepts have emerged which may further understanding of the workings of the"Triones": the first is a political concept which can be called "the search for a'new enemy'"; the second is an economic concept involving incorporation of theareas of influence of the "Trione" into production processes.6

The search for a new enemy

The end of the Cold War has posed a serious problem for NATO. The NorthAtlantic Treaty Organization was based on the existence of the possibility of aviolent conflict between the two ideological groups which defined the bilateralnature of the international political system after 1945. Two superpowers with theirpolitical followers and two pacts, NATO and the Warsaw Pact, confronted eachother. This political structure and the existence of a common threat kept the Westunited on both sides of the Atlantic, thus guaranteeing the supremacy of theUnited States. The disappearance of the Soviet threat has endangered the ex-istence of NATO as its raison d'etre has ceased to exist. Thus, "a new enemy"must be found to overcome this identity crisis reflected in Western thought.

One of the consequences of this line of thinking has been the appearancein the West of a whole series of works identifying the Islamic world as the new

6 A. Lorca, The borders of the EU", Working paper no. 57, Centra Internacional Carlos Quinto, UAM,Madrid, 1991.

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enemy. The concept of the existence of an "Islamic threat" is largely based onWestern strategic writings. Naturally, radical Islamism has not been fabricatedby the West; it exists and must be criticized. Fanaticism is not, however, thedriving force of any culture, be it Western or Islamic. There is no doubt that coregroups of fanatics exist in both cultures, and that they must be condemnedwherever they appear.

The fact that the southern border of the EU is Islamic is what is importanthere. This circumstance will have an important impact on economic relationsbetween the EU and the Mediterranean area, in that "the enemy"—the threat—has been moved from the eastern to the southern border. This is not surprising,as the concept of enemy implies "a neighbour effect", a constant usually associ-ated with a political stand on security. This is not the case, however, whenspeaking of the economic conflict of the "Triones" where economic competitionis possible among states which are geographically separated by distance.

Before going on to analyze the economic repercussions of the concept ofan Islamic threat, it may be a good idea to stop and analyze the concept itself.Basically, the idea began to take shape in the early nineties. The search fora new enemy became necessary to maintain NATO's bureaucracy, of whichthe majority of Western countries were in favour. This meant that a way hadto be found to justify defense budget spending. Hence the policy relating tosecurity needs was extended to include what is known as "soft threats",matters such as the war against drugs, terrorism, radical Islamism and large-scale migration, among others. Western politicians did not invent thesethreats; they only used them for their own purposes, as is logical. Neverthe-less, this approach has made it impossible to enjoy the benefits of peacedespite the disappearance of old military opponents. Instead of reducing themilitary apparatus, the West has come up with new types of threats to serveold objectives based on maintaining a balance of power. This, rather than thethreat of radical Islamism, which may be solved by taking economic andpolitical measures, is the real problem.

Fukuyama predicts a non-violent confrontation among the "Triones". Theseconflicts will take place within each area of influence: Yugoslavia, the MiddleEast, etc. The military needs associated with such conflicts are different fromthose associated with the bipolar conflict. No armoured tanks will be required tofight like those destined to the plains of Central Europe; Rapid InterventionForces will be needed. NATO, the Western European Union and the Organizationfor Security and Cooperation in Europe (OSCE), among others, will have a roleto play in these conflicts. The problem is that these organizations and the stateswhich run them need to establish the functions and tasks to be carried out, aswell as the cooperating agencies to be involved. The solution might lie in eco-nomic development of and the introduction of democracy to the areas which makeup the borders in question. Fukuyama, like Emmanuel Kant, reminds us that warsare not fought among democratic states. A prerequisite, however, for the intro-duction of democracy is economic development. <—i

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Huntington rejects Fukuyama's theories.7 He suggests that future conflictswill occur between civilizations, and possibly, between the Western and Islamicworlds. In any case, whichever hypothesis one accepts, the disappearance of theconflict between East and West has affected and will continue to affect signifi-cantly relations between the European Union and the Mediterranean area.

As this premise is an important one, it may be worth concentrating on it fora moment. There is no doubt that cultural differences are one of the many factorscontributing to the conflicts that are arising. Potential conflicts among culturesdo exist, but acceptance of this viewpoint leads to the refusal to admit thepossibility of "cross fertilization" between cultures, thereby ignoring the fact thatmost civilizations share the same values and ideals. The rituals, organization andmanifestations of a civilization are generally what make it different from anotherrather than its fundamental values. Huntington, however, emphasizes the differ-ences, which he claims makes cultures incompatible. This interpretation sepa-rates the EU from its border to the south, although this same interpretation mightbe applied to the Slovak-Orthodox border to the east.

The root of the problem is to be found in the West's vision of Islam, whichis based on ideas associated with aggression, brutality, fanaticism, irrationality,the oppression of women, as well as feudal stances and regimes very differentfrom those common to democratic states. These are the cliches constantly di-vulged by Western media and based on the opinions of self-appointed "experts"in the subject. Although these experts are usually more ignorant than not, inreality the ideas they present do affect us and pose difficult problems. This imageof aggressiveness and fanaticism must be unmasked before we can provideconstructive criticism and lay the foundations for positive and productive relationsbetween Islamic nations and the West.

Threat perceptions are normally based on feelings of fear and insecurity.What does the West fear from the Islamic world? Perhaps it is fear of militaryaggression. Some would claim this is true, basing their claim on feelings ofaggressiveness caused by the historical humiliation inflicted on the Islamic worldby the Western world. This argument brings to mind historical cycles: the Islamicconquest of Sicily; the Islamic armies1 drive to Poitiers; the Crusaders' battleagainst the Ottomans and the siege of Vienna during the 17th C, followed bythe European states taking the aggressive initiative in the 18th C , imposing theircultural, economic and political rule on those they colonized. This oppressive ruleis still in effect today; the second Gulf war is a good example. If what is fearedis military aggression, this is no more feasible today than a Russian attack onBerlin. Although the military forces of the Islamic nations are important, theywould not be capable of carrying out an attack on Europe.

Perhaps the problem is that during the current historical cycle, immigrationhas brought Islamism inside Europe. An estimated 6 million Moslems, mainly

7 S. Huntington, "The Clash of Civilizations", Foreign Affairs, Winter 1993.

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from the Maghreb and Turkey, live in Europe today. Yet this figure represents nomore than five percent of Europe's population. Moreover, it is no different fromthe previous historical cycle when Christians lived in Moslem territories. It wasthe Christians who, when they came to power, forced the Jews and the Moors toleave their lands; it was the Christians who were responsible for the "ethniccleansing" carried out in Spain.

Perhaps it is fear of cultural aggression. Basing this fear on the "symbol ofthe chador" seems more a joke than anything else. The term "West" is not relatedto the idea of Christianity or another religion; rather, it represents a culturalessence. "Islam", on the other hand, is not understood as referring to a culture,which it does, but to a religion. As such, it is confused with the term "Moslem".The reason for this is the emergence of "fundamentalism", a term indicating areturn to orthodox religious beliefs.

Fundamentalism is actually a Christian-Protestant term first used at thebeginning of the 18th Century to describe Christian movements on the Atlanticcoast of the US. These movements proposed a strict interpretation of the HolyScriptures. Kepel calls them the "scourge of God".8 Such movements are foundin all religions which base themselves on holy texts transmitted to man throughdivine revelation. There is nothing abnormal or negative about them. The dangerlies in the use of such religious movements to obtain political power, as has beenthe case with all religious movements at different times in history. This is thedanger, as there is nothing easier than to rule and kill in the name of God, withouthaving to account for ones acts in this world, but in the next. This is the dangerand, perhaps, it is this which the West fears: the resurgence of religious wars.

Could the West be suffering from a "demographic fear" syndrome? The factthat Europe's population is ageing suggests the possibility of a future with massimmigration from the South driven by the burgeoning populations in those areas.It is perhaps a combination of radical Islamism and mass immigration that theWest fears. These immigrants, unlike those which Europe has known in the past,are not easily integrated into European society as they insist on maintaining theircultural identities. Could it be the transformation of Europe into a multi-religious,multicultural society that Europe is against?

The military and technical superiority of the West is evident, so what is theWest afraid of? Perhaps it is Islam as a religion, Islam as a religious and politicalunit that the West finds threatening. Most Islamic nations, however, are laycountries; their leaders are laymen. Only Iran, Sudan, Pakistan and Saudi Ara-bia—each in its own way—are considered Islamic in the religious sense. Thethreat of radical fundamentalism is more of a threat to the non-religious leadersof Islamic countries than it is to the West. According to Western logic, thereligious and political unity of Islam leads to fanaticism. Yet traces of fanaticismare found in all cultures and religions. National Socialism, Fascism and Stalinism

8 G. Kepel, Les Politiques de Dieu (Paris: Editions du Seuil, 1993).

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were all products of the West; so was Waco, Texas. Yet this does not lead us tobelieve that fanaticism is the essence of Western culture. Why then do we haveto consider Islam fanatical?

What has actually happened is that a type of Islamism has been fabricatedin the West to fit its objectives. A distinction between "Us" and "Them" has beenestablished. This is where the concept of the Islamic threat as the enemy origi-nates. There is certainly no real military threat, nor is there a cultural threat. Weare afraid of the Third World and of being contaminated by its poverty. It is afear of losing the economic well-being which has been attained in the West, eventhough that well-being is only enjoyed by some. The fear of instability caused bymassive immigration along with the fear of future disruptions in the supply of oilcommodities prompted the West to station 500,000 soldiers in the Middle Eastduring the Gulf war. These reactions are based on the purest of Western ration-ality: material well-being.

The West considers itself to be guided by reason, whereas it considers theIslamic world to be guided by faith. This vision is erroneous and precludes thepossibility for communication between the two cultures. This image is used tofoment the concept of religious irrationality when it comes to "Them"—those whoare different from "Us". It is used to reinforce feelings of racism as well as theidea of a strong Europe. It clearly indicates a rejection of feelings of humanitari-anism and solidarity in Western culture.

Certainly, the idea of the "enemy to the South" which includes the "Islamicthreat" has taken root in public opinion in the West. But has it taken root inforeign policy in the West? The cliches about the West being secular and there-fore rational versus the Islamic nations being religious and therefore irrationalare not found in foreign policy circles. The Camp David agreements are a goodexample of this. President Sadat's way of negotiating was an example of rationalbehaviour based on state interests. It is true that Sadat was assassinated but sowere the Kennedys and Olaf Palmer. One can find fanatics anywhere and, un-fortunately, there is no way to remain safe from them.

Tension in the Middle East is high and politicians use certain terms andideas destined for domestic consumption. All politicians do this, including thepresidents of the US, who even do so frequently. It is a mistake to claim that thistension is due to religious motives. It is also a mistake to use public statementsmade by their leaders to support this argument. American presidents often men-tion the name of God in their speeches (Europeans do so much less) but that isno reason to say that the United States is a theocracy.

This criticism of Western views is not meant to be a defense of dictators orradical Islamic fanaticism; yet, Aristotelian logic must be used to analyze everysituation no matter how brutal the circumstances appear to be. The concept ofthe Islamic threat and the claim that Islamic leaders are moved by religious andfanatical motives makes the need to examine the opinions and problems of "theothers" unavoidable. There are times when terrorist acts are carried out simplybecause there are no other means of expression available to try to solve a

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problem. This is by no means a justification of terrorist acts. Rather, it is anattempt to try to find logical explanations for the actions of fanatics in order toreact by using strategies based on Western rationality.

The idea of the enemy has taken root in Western media and public opinionin general; however, it has not affected the small sector of the elite who shapeWestern foreign policy. Foreign policy is generally based on state interests, notreligious criteria. Undoubtedly, religious movements may affect state interests,in which case the state responds to the way its interests have been affected andnot to religious feelings. A dichotomy does, however, exist in the West: first,foreign policy is designed for an elite whereas domestic policy is designed forthe general public; and second, the Islamic threat is not the real problem. Theproblem is an identity crisis in the West. Nazism, Stalinism and racism do notrepresent Western Christian values, but they have happened in the West. Byclaiming the existence of an Islamic threat with fanatic followers we are able toconfirm the fact that "They" are fanatics and "We" are not, that "They" areirrational and "We" are not. The West has not turned its foreign policy into acrusade but has simply maintained an imperialistic policy aimed at maintainingits control in an area in which it has vital interests.9

There are undoubtedly Western leaders who use the idea of a possiblethreat for their own purposes. This is exactly what Huntington does in the articlementioned previously. His thesis is full of contradictions, but that is unimportantas his main objective is to maintain Western control: the West has to arm itselfagainst some kind of enemy. In this, Huntington's thesis has fulfilled its purposein the West.

As long as this theory is used for domestic consumption and elitist groupscontinue to shape foreign policy on the rational basis of state interests, every-thing will be fine. Huntington's work merely represents an idea designed to becited at conferences and in articles. The danger is if the elite in charge of foreignpolicy is persuaded to believe this theory. The danger is, therefore, in the pos-sibility of Huntington's own prophesy, "the West against the rest", coming true.Christians would be pitted against Moslems and whites against blacks, while thereal problem would continue to be none other than the North versus the Southand matters relating to different levels of economic well-being. This danger,however, is far from imminent as the elites who control Western foreign policyare intelligent and cynical enough to manipulate Huntington's theory to suit stateinterests. They have done so before and will continue to do so.

The Areas Constituting the Borders of the European Union

Some may feel that too much emphasis has been put on explaining the conceptof the "Islamic threat". Nevertheless, this concept holds vast implications for theworld of economics, in which it is generally unknown. In this section, the concept

9 J. Hipper and A. Lueg, The Next Threat (London: Pluto, 1995).

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of the areas which comprise the borders of the "Triones" will be defined andexplained using those of the EU as an example.

During the development process, each one of the "Triones" has, as needed,designated different tasks to each of its areas of influence. Thus, the productionfactors and resources of these areas have been used in different ways. Thisprocess has been conditioned by geographic, historic and cultural factors.

The structure of the geographic production of the "Triones" may be com-pared to the central-peripheral relations within the North-South context. The"Trione" complies with the objectives of the economic needs of the North. As itsgeographic dimension is considerable, its internal structure is complex. In thecase of the EU, its structure may be compared to a central core in which mostof its economic activity and population are concentrated. Geographically speak-ing, it may be identified by an axis which runs from London through the RhineValley to Milan. The economic power of the "Trione" is concentrated in thiscentral core.

Other important centres involving a lesser degree of economic activity mayexist within the areas pertaining to a "Trione", but they have a dependent link tothe central core. Geography and especially the location of river basins are factorswhich determine where rings spring up around the central core. These ringsmaintain specific relations with the central core and are structured by transpor-tation systems. In the European "Trione", the ring farthest from the central coreis found in the Mediterranean area, which becomes a border to the EU. Suchborder areas develop a linking function between the world outside the "Trione"and its central core.

In the case of the Mediterranean, this function is intense and complex sincethe area's history and the fact that the Mediterranean is a closed sea havefavoured the creation of a complicated network of relations. The central core ofthe Rhine has taken advantage of inputs from both sides of the area forming thesouthern border. This was so in the fifties and sixties when much of the labourforce came from Mediterranean areas near this southern ring. And the area wasextended in the seventies and eighties when emigration from the Maghreb in-creased'greatly.

In the eighties, the countries in the central core began to ^xport pollution byrelocating part of their chemical industry in the aforementione*d territories. Curi-ously enough, they did not export capital to build assembly plants and create anoutlying industrial area. Through NAFTA, on the other hand, the US created an"assembly model" to avail itself of the Mexican labour force and later internation-

al ize its borders. This model, which has been successful, could be used fordevelopment in the Maghreb, though the US has also imported labour, especiallyto its agricultural belt in the south.

Japan, the geographic south of which constitutes the central core of theAsian "Trione", has instituted different policies in its areas of influence. Given itsinsularity and culture, Japan has maintained an isolationist policy and closed itsdoors to immigration. One must remember that it was American gunboats which

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forced Japan to open its doors to trade during the last century and that it is theUS with its "legislative weapons" and negotiations which is still attempting toopen Japanese markets today.

As it is against immigration but in need of cheap labour, Japan has had tosearch for other solutions. It has opted for automation as a solution; it is thecountry in the world with the greatest number of robots, meaning that capital hasbeen used to solve the labour problem. This policy has been so successful thata very positive foreign profit margin has been created. Since Japan has thecapacity to export capital, it has opted to avail itself of this alternative rather thanimport labour. This is quite different from the solution adopted by the EU. Al-though, it has yet to been seen what will happen in the new border area whichis opening in the East; the EU may end up adopting the same solution as Japan.

The production function of the central cores implies "consuming" geographicterritories as inputs with specific tasks to carry out. Evidently each one of the"Triones" has embarked on a different path. The geography and history of theareas of influence must also be taken into consideration. Japan's economic areaof interest is geographically spread out. The distances between "the dragons"and "the tigers" is great. NAFTA's economic area of influence is very concen-trated with short distances between the territories involved. The EU, because ofits history, has complicated geographic borders composed of land and sea areas,which are temporarily changing due to the expansion process under way.

These areas are historically complicated in that they represent cultural andeconomic dividing lines. While three seas formed part of these borders before1990, the Baltic Sea is now practically encompassed by the EU since its expan-sion in 1995, thus changing the image of the European "Marem Internum"; theMediterranean seems condemned to being no more than a border of the EU.

It is between the Black Sea to the southeast and the Baltic Sea to the norththat the areas bordering the east are to be found; the Mediterranean, on the otherhand, borders the area to the'south. Europe has a Slovak and Orthodox border,area to the east, an Arab and Islamic one to the south and an area in whichOttoman and Turkish cultures meet along the Black Sea. The latter is a conflictualarea with Orthodox Christians, Roman Catholics and Ottoman Moslems.

Unstable, conflicting border areas pose problems for the security of theEuropean Union. The problems in the areas bordering NAFTA are more easilysolved, given the geography of the area and the nature of the problems. The AAposes problems relating to power struggles which have yet to be resolved.

The economic impact of this'territorial mechanism is vast. In the seventies,the EU started to develop a specific jargon relating to economic matters with itsonly existing area of interest at that time: the countries bordering the Mediterra-nean. In that jargon the European Union successively used the terms GlobalMediterranean Policy (GMP), Mediterranean Renewal Policy (MRP) and Mediter-ranean Free Trade Area (MFTA) when referring to its involvement in the Medi-terranean area. The nature of these relations with the southern area of influencehas been strictly commercial, not too effective and not very generous. European i—i

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public opinion on the Islamic area of interest must be borne in mind, which meansthe concept of "Them" as being different from "Us", as already seen.

In the nineties, the countries in the southern area of influence are going tohave to compete with those in the eastern area, which has opened up with thedisappearance of the USSR. As the EU considers this eastern area part of "Us",the aid given to the area has been generous. It is thought that this area willeventually become a part of the EU. Given these two factors, the countriesbordering on the east are felt to form an area which is synonymous with ideasof cooperation, cultural continuity, political stability and a potential for rapideconomic recovery. The economies of this area are undergoing a transition froma state-controlled planning system to a market system. The possibilities forattaining successful, stable economies and democracies are considered quitegood. As they are located near the large Central European markets and the futuremarkets that will spring up in what once was Russia, member states of theEuropean Union with great economic potentiality have come to prefer this areafor their investments. Such is the case of Germany and Austria, which haveplenty of historical, cultural and economic reasons to turn towards the east.

France, Italy, Spain and Greece, however, have interests to the south. Thatis why a balance of all these interests must be sought in Brussels. All membersof the Union agree on the established objectives: the attainment of economic andpolitical stability in the border areas. This means that economic development isa necessary condition, along with the introduction of democracy. The consensusis not so easily achieved, however, when the decision has to be taken about whois to pay the costs related to this policy and how payments are to be allocated.

Economic differences

The economic relations between the EU and the Maghreb are mainly contingenton two factors: the fact that the Maghreb represents an area of influence whichincludes countries bordering the EU and the emergence of what is called the"Islamic threat". Other factors influencing these relations are the characteristicsunique to the "Islamic economic system" and the political instability in the area,which makes foreign investors uneasy. An examination of these other factorsgoes beyond the scope of this article.10 Nevertheless, it must be kept in mindthat the southern border is an area which separates the North from the South,two regions that have very different levels of economic development.

The countries on the northern side of the border, those on the EU-Mediter-ranean side, produce 80 percent of the GNP of the Mediterranean area. Theyare responsible for nearly 85 percent of all trade, 89 percent of all exports and80 percent of all imports. More than 70 percent of what the Maghreb exports issent to the EU, while less than 4 percent of the EU's total exports are sent to

10 For more detail, see A. Lorca, "Algunas reflexiones sobre la economfa de los Paises Arabes", Work-ing paper No. 62, Centro International Carlos Quinto. UAM. Madrid.

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the Maghreb. Trading among the countries of the Maghreb represents only 3.3percent of the total trade volume of the Maghreb. Such marked differencesfrequently make it difficult to maintain smooth relations between the two sides ofthe Mediterranean. These differences obviously contribute to what may beencalled a dividing factor between the North and the South.

There are also very strong differences when it comes to food supplies. Alarge part of the imports to the countries in the Maghreb is food needed to coverthe requirements of a growing (at an average annual rate of 3.2 percent) popu-lation whose eating habits have undergone changes as incomes have increased.Algeria, for instance, spends more than 30 percent of its oil revenues on foodimports. Only 40 percent of the cereals consumed in the Maghreb are producedthere during an average year; and during a drought year, this percentage maygo down to 30 percent. If the money spent on food is added to that spent ondefense, it represents more than 6 percent of GNP. In the cases of Morocco andAlgeria, this has meant accumulation of a foreign debt which is a hindrance totheir economic development. Morocco's foreign debt, which is the worst in thearea, is nearly double the amount of revenue received annually from exports.

The unemployment rate is nearly 40 percent in an area in which 65 percentof the population is under 15 years of age. Economic growth, although substantialand ranging from 4 to 7 percent annually, is unable to absorb the number ofyoung people entering the labour market. The only solution is thought to beemigration to the EU. But this intense immigration has an effect on perceptionsof a "threat from the South". Predictions for the year 2025 only serve to heightenthese perceptions. The emergence of impoverished sectors of marginalizedgroups in densely populated areas has helped to foster a politically radical typeof Islamism. Governments of the countries of the Maghreb have been unable tofind a solution to the social unrest generated by these circumstances.

The differences between the levels of economic development on oppositesides of the Mediterranean continue to grow despite the efforts of the EU andthe countries of the Maghreb. Nevertheless, the problems of the countries bor-dering to the south have been relegated to second place on the EU's agenda,given its interest in the internal development of new institutions and in theopening of an area of interest along its eastern border. The ideological conflictbetween the East and the West may very well be replaced by economic conflictsbetween the North and the South. The difficulties in the fishing negotiations withMorocco are a clear example of this. The South is making a great effort toconvince the North that the North will reap benefits in the long term if it providesaid for the economic development of the area. Unfortunately, northern politiciansare playing a short-term game which is preconditioned by the system of demo-cratic elections.

Political rhetoric comes up against hard facts. In 1976 the real per capitaannual income of EU countries was about 5,600 dollars, while that of the coun-tries bordering the southern area of the Mediterranean was about 600 dollars. In1990, the EU had reached 13,000 per capita, the countries of the Maghreb not,—.

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even 1,400. The projections for the year 2000 indicate that these differences willbe even greater. Although it is a fact that the countries of the Maghreb haveexperienced substantial economic growth in absolute terms and that economicconditions have improved considerably thanks to the enormous effort made bytheir people and the emergence of an increasingly important business class, itshould be emphasized that the relative difference between countries on oppositesides of the Mediterranean is one of the main motivations behind the intensedesire to emigrate to the North. Estimates by Salvatore indicate that the countriesof the Maghreb would have to achieve an annual growth rate of 30 percent inorder to maintain only the current differences in per capita income.11 It is impos-sible to imagine this happening.

Given the political and economic crises it is undergoing, the EU will beunable to provide the necessary funding. In addition, the feeling that the area ofinterest to the east is like "Us" will predispose European public opinion againstallocating the massive funding needed to carry out the aforementioned project inits southern area of influence. It will also be difficult to achieve solidarity undercircumstances in which corruption and inefficiency are found.

It seems.quite unlikely that other sources of funding will be available. The UShas concentrated its resources on countries in the Eastern Mediterranean area asa result of its Camp David agreements. The countries in the Maghreb receive barely25 percent of the amount sent to Israel and Egypt. The Madrid Conference and theagreements which are still being negotiated will cause economic funding from theEU to be diverted to the Middle East. Japan concentrates its efforts on Asia. Thecountries of the Maghreb have a negative trade balance with Japan. This makesone think that they are paying interest on their debt and that Japan is not interestedin this geographic area considered to be a European area of influence.

Based on this information, it seems clear that the countries of the Maghrebwill be forced to generate their own capital and improve administration of it, asthey are unlikely to obtain sufficient funding from other sources to solve theirproblems. This does not mean that the EU is not going to continue to increasefunding to the area. It did so recently at the June 1995 Cannes Summit and theincrease was significant; such funding, however, will always be insufficient.

The countries of the Maghreb cannot expect to receive massive financialresources from the EU. It is also difficult to foresee how the concept of the"Islamic threat" may affect future allocations. One would expect EU foreign policyto continue favouring funding, in spite of negative public opinion, as a means ofattaining its main objective, the political and economic stability of the countriesin question. The idea of the people of the Maghreb countries having to bear theburden and effort needed for their development seems to be ever more clearlydefined. But then again, this is really no different from what has happened inSpain, Portugal, or any other country for that matter.

11 M. Salvatore, "Ethics and Increasing Internationa! Income Inequality", Journal of Regional Policy, vol.11, July/Dec. 1991.

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Characteristics of trade relationsThe economic differences between the North and the South influence traderelations which present some rather peculiar characteristics. The first is that alarge portion of trade relations are conflictual.

In the agricultural sector, for instance: while the export of agricultural productsis of special importance for the Maghreb, this is not equally true for the EU, eventhough it may be relatively important for some member states, such as Spain.Countries in the Mediterranean area with similar soil and climates produce the sametype of products. Due to the perishable nature of these products and the difficultiesinvolved in storing them, they must be sold rapidly on European markets. Further-more, if the products are the first to get to the market, they will obtain significantlyhigher prices. This results in EU member nations and Mediterranean third countrieshaving to sell their products on the markets in short periods of time.

Another area of conflict is fishing rights, which are in the process of beingtransferred from the European fishing fleet—mainly the Spanish fleet—to theMoroccan fleet.

Finally, the Mediterranean area has been a constant source of emigration,although this- was not of a permanent nature until recently. This change will,however, oblige the EU to decide whether to accept its transformation into amulti-cultural and multi-religious society. This decision, which is not an easy one,is not void of conflicts.

The second characteristic is the asymmetry of trade relations. An symmetricrelation of dependence is apparent in trade relations between the EU and theMaghreb. Seventy percent of exports from the Maghreb are sent to the EU andrepresent more than 8 percent of its GNP. EU exports to the Maghreb, on theother hand, barely represent 4 percent of its total exports and less than 0.5percent of its GNP. It may then be concluded that European markets are vital tothe Maghreb, while it would be impossible to ascertain the contrary, even thoughEurope is dependent on the Maghreb for the supply of most of its energy. Thisstatement could be attenuated by using certain isolated figures to point to theimportance of Maghrebi markets for some Mediterranean EU members. Never-theless, trade relations of this nature may lead to a situation involving undesiredresponsibility on the part of the EU. The EU would be forced to carefully evaluatethe effects its decisions will have on the Maghreb and this would lead to asituation of limited freedom of action.

Thus the conflictual nature of trade relations makes mutual perceptions onboth sides of the Mediterranean even more "caustic".

Characteristics of the Arab economic system

Another difference which makes relations in the Mediterranean area difficult is thediverse nature of the role of the state in the economic system. The distinguishingfeature in the concept of the Arab state is its role as "benefactor", a role alwayslinked to those in power. In this setting, the state is expected to solve the

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THE EU AND THE MEDITERRANEAN:"US" VS "THEM"?

problems of its citizens and, of course, those of businesses which always seekgovernmental protection. Although it is true that this type of behaviour may beobserved in many other countries, it is not so rooted as in Arab countries.

This model is closely related to a political system which ensures the loyaltyof its subjects by means of this mechanism. In principle, this is no different fromwhat happens in Europe, where the recipients of gifts and privileges are membersof the political parties rather than the tribes and clans in the Arab world. But thisbehaviour hinders the functioning of an efficient market which must necessarilybe free. The state becomes omnipresent and its interference in the functioningof the market is continuous. The state concentrates too much power on thismechanism and therefore acts arbitrarily.

In order for a market to function efficiently it must be free of excessive stateintervention. Contrary to the situation in a state-controlled system, the market isdecentralized which is why it combines so well with democracy on a politicallevel. Freedom is a prerequisite on both the economic and political levels.

Since the end of the seventies, the International Monetary Fund has beentrying to convince Arab leaders of the need for openness in economic systems.Privatization, reduction of bureaucracy and deregulation are steps which needto be adopted for the correct functioning of the market. This transition processpresents difficulties, however, and there is much resistance to it since the finaloutcome of the process will involve important changes in the political arena suchas the introduction of a greater degree of democratization and the transfer ofpower in the political structure. This possibility is not accepted by the elite inpower.

The Free Trade Area

The solution designed by the EU to reconcile the differences in its relations withthe Mediterranean area of interest is the creation of a Free Trade Area'(FTA).This proposal was set forth at the Euro-Mediterranean Conference in Barcelona.The history of FTAs as conceived by the EU has not been very positive to date.This is, in fact, not surprising partially because the EU conception conflicts withthe very essence of what a tariff union ought to be.

Nevertheless, the Commission has long been contemplating the possibilityof creating a Free Trade Area with the countries bordering the EU. The image ofconcentric circles with different intensities and degrees of integration would formpart of this scenario in which a hard nucleus—perhaps an EU with various levelsof involvement—and an external ring composed of countries bordering the EUcombine to create a significant Free Trade Area. Said area would be created bymeans of bilateral agreements with the different countries.

In 1990, the European Commission justified the European countries' refusalto provide budgetary funds to Morocco with the excuse that the country did notrespect human rights. It later made the political gesture, however, of offeringMorocco the possibility of being the first country with which it would negotiateagreements of this nature. Yet, the Mediterranean reality never ceases to amaze

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those in Brussels: Morocco will not be the first to sign these agreements, Tunisiawill. This seems to be due to the apparent lack of interest with which Moroccogreeted the proposal. The "impression" given was a negative one; but emphasismust be put on the word "impression" as no serious research systematicallyanalyzing the isolated implications for Morocco is available. It does, however,seem to be clear that the proposal regarding the creation of a Free Trade Areahas not stirred much enthusiasm on the part of Morocco. The opposition of Italyand Spain to the initial drafts of the agreement must also be noted.

There are apparently two reasons for this. The idea of the creation of anFTA was not a new one; the actual agreements in force when the proposal wasput forward already contemplated the creation of "a type of Free Trade Area".Industrial products had already been allotted free access to European markets.Above all, the EU had established protective measures regarding those productscoming from the Maghreb which were better able to compete with EU products,such as textiles. Although the GATT agreements had resolved this problem, atleast on paper, scepticism in the face of EU gestures, substantiated by develop-ments in recent history, along with the scarcely novel nature of the proposal, didnothing to foster Moroccan enthusiasm for the new proposals. Another reasoncertainly was—and is—the fear that a newly created and growing Moroccanindustry might suffer from the competition of EU industry. Domestic interests inMorocco greatly influenced its government's decisions.

In addition, the conflict of interests that the creation of an FTA would causewith certain countries such as Spain and Italy must also be considered. Moroccantrade is composed of Mediterranean agricultural products, raw materials andtextiles. Agricultural products would hold special weight in the FTA agreements.The EU imposed very hard conditions on Spanish agricultural products, postpon-ing their free access to European markets. Indeed, the total removal of EU tariffbarriers on Spanish products only came into effect on 1 January 1996. Therefore,Spain believes that the creation of an FTA with Morocco and Israel would reducethe advantages it has waited ten years to obtain. The Spanish position is thatthe FTA is an EU policy and that Spain should, therefore receive compensationfor the negative consequences arising from this EU decision.

The Spanish position, combined with the excessive demands of the Moroc-cans and the increasingly conflictual nature of matters such as fishing, made itimpossible to sign an FTA agreement with Morocco until November 1995. Asthese circumstances did not exist in the case of Tunisia, it signed this agreementone year before it was scheduled to do so. An agreement.has now also beensigned with Israel after laborious negotiations with Spain.

Another important aspect of this matter concerns the structures of theeconomies of the Maghreb. The more complementary the structures of the econo-mies involved in trading in an FTA, the more active the FTA will be. This is also truewhen the economies involved are highly developed. Where economic developmentis limited, however, trade will probably be based on single product export with theless developed country exporting raw materials and the products of single crop •—i

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farming. This is the typical profile of oil-producing countries. For the moment, thenature of the Maghreb's economic system is such that it does not present sig-nificant degrees of diversification of its economies for complementarity to exist.

The argument which might be put forward is that an FTA would help to fosterthe diversification of the economy. Such diversification must, however, take placeon both sides of the border in question, as this is the basis of the success of the"assembly" model. And there is another important factor to be kept in mind: ifthis entire process is to be successfully carried out, capital, technology and,above all, a specialized workforce will be needed.

In the hopes of resolving some of the legal implications which may arise fromthis process, the EU has already begun taking steps in this direction by signing theEuro-Mediterranean Agreement. Such a process involves a long period of transitionwhich could last from 10 to 20 years. It will have to be implemented in accordancewith the recent agreements reached at the Uruguay Round of the GATT as well asthe regulations established by the World Trade Organization. The proposals set forthin Barcelona are to come into effect in the year 2010.

The project is not an easy one as clearly demonstrated by the integrationprocess of the EU. itself and other similar experiences. This type of projectinvolves a long period of legal harmonization—the establishment of norms relat-ing to the origin of products, competition, harmonization of quality standards,sanitary conditions, etc.—which is not impossible to achieve but a rather longand difficult process. The harmonization of norms relating to subsidies, based onthe need for each economy to be a functioning free market, is one of the firstdecisions which must be made. A certain degree of coordination of macroe-conomic policies will also be necessary.

The problem is that the harmonization of political activities is of a volun-tary nature. EU member states have already taken the political decision toconcede part of their national authority in these matters; countries in thesouthern border area, on the other hand, are unaccustomed to relinquishingauthority. They are, indeed, very reluctant to accept any act which might leadto that outcome. This is a difficult test of political maturity for these countries,especially since the EU will be unable to pressure them by providing sufficientfinancial support.

The EU will not be able to finance the complete development process in theMediterranean area of interest: the Mediterranean third countries will have togenerate most of the necessary capital for their development themselves, al-though the technology and some part of the capital will naturally be European.In any case if these countries wish to attract European investors, fundamentalmeasures will have to be taken. Some of the most important are: legislation ondirect foreign investment will have to be liberalized; the legal system will have tobe modernized and made more efficient; foreign investors must be made to feelthat they have legal recourse; the technical training given to the workforce willhave to be improved—as time passes, a qualified workforce is seen increasinglyas a sine qua non condition for economic development.

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The creation of an FTA leads to the integration of markets and marketdynamics will make it necessary to improve and integrate communication net-works, energy systems and transport facilities. All of these actions require a greatdeal of political valour, as well as the implementation of complex technical solu-tions. None of this is impossible, but it is sufficiently complex to require firm,sustained political will and action. Such firm and sustained political will will beeven more important in those cases in which forms of integration involve relin-quishing part of one's national authority.

A profound knowledge of the situation in the Mediterranean is needed torationally resolve the problems which will have to be faced during the develop-ment process in the Mediterranean. An effort to investigate and identify problems,tendencies and solutions must be made by all those involved in the Mediterra-nean area, whether in research, administration or the private sector. A detailedanalysis of the mechanisms and peculiarities of the Mediterranean economic andproduction systems is essential for implementation of this ambitious project fromwhich all the countries and peoples involved will benefit.

One final comment is in order. The process involving the creation of an FTAas a device to spur development in the Mediterranean area will have to be imple-mented in an atmosphere in which harmony prevails among the countries on bothsides of the border. All Euro-Mediterranean political decisions must be based ondialogue and mutual respect. This objective will be difficult to attain unless there isa general mobilization of political will throughout the Mediterranean area.

Conclusion

An attempt has been made to analyze the factors which complicate the relationsof the EU with the countries of the Mediterranean area. The most important factoris that the Mediterranean, which forms the EU's southern border, is, in essence,a geographical and cultural dividing line between the North and the South, givingrise to the idea of a "threat from the South". There is friction in both political andeconomic relations. The latter, such as those relating to agricultural and fishingmatters, are intrinsically complicated and, therefore, not easily resolved. Theappearance of terrorism has added even more complexity to the situation. Theexistence of two distinct concepts of state—a liberal concept in the North, anda concept in which the state is seen as an intervening benefactor in the South—makes relations difficult since the countries of the South do not participate in afree market economy and the process of integration of increasingly interdepend-ent global markets.

The solution resides in dialogue and open cooperation in the framework ofthe Global Mediterranean Policy imposed by France. The Barcelona Conferencewith the Spanish initiative is hoped to be a way of beginning a new phase inwhich participation in and responsibility for the solutions adopted will be sharedby all the peoples of the Mediterranean.

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