Italy, Europe and the U.S. The Transatlantic link and its future

Rome
1 July 2008

This conference was launched in memory of all that Giovanni Agnelli gave to strengthen relations between the United States and Italy. Discussion went on to focus on two specific demands: one the one hand, the importance of safeguarding the positive aspects of transatlantic relations’ long history and, on the other, the need to constantly adapt policy and discussions to novel challenges.These early years of the twenty-first century have already shown clear signs of change – in some cases radical change – in areas such as the very structure of the international system. Such developments render ever more crucial good relations between the shores of the Atlantic. For the United States, the key now is to create the conditions for consensus around their leadership, which remains supreme in many areas. This leadership needs to be cultivated and the country’s ability to create and manage broad, flexible coalitions should be based on a strong Euro-American foundation. For Europe, with increasing urgency, the key is to live up to its enormous potential: the Union must improve synergy among its members, as regards its institutions, its strategy and its actions, on every front.The euro – emblem of a successful visionary project – represents a keystone in this process; indeed, the resolution of many problems rides on the success of the euro-dollar relationship. The European continent, however, still suffers from several contradictory tendencies: despite the constant push towards integration, policy-making is also becoming increasingly “nationalized”, due to ideals as much as practical demands.All the Atlantic partners need to collaborate closely in such key sectors as climate change, energy security or nuclear non-proliferation.Global economic prospects remain uncertain because of various areas of instability. Some problems are new, due to ongoing globalization, and the risks of spiralling distrust among key players, sparked by the high costs of raw materials and lower savings, are very real. Protectionist tendencies – which tend only to make problems worse – continue to play a significant role.One novel difficulty lies in the repercussions being felt throughout the world of the American economy’s slowdown: data suggests that the level of interdependence between the euro area and the US is slightly lower than in the past, but not much. Today, the so-called “decoupling” process, an element of American and Latin American policy in particular, is having a significant effect, while the Asian economies continue to grow at impressive rates despite tight links with the American economy. The situation, needless to say, is extremely complex.One of the greatest challenges in coming years will be to integrate emerging economies into the global system while reinforcing the world’s collective capacity for governance. A series of delicate compromises will have to be reached, as current rules are based on the net superiority of Western economic models. Phenomena such as that of the “sovereign funds” remind the West how much influence up-and-coming players can wield, especially when they are not governed by those rules that condition their Western counterparts’ behavior.

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