The State of the Unions: testing transatlantic expectations after Bush

The participants analyzed the scenario that has emerged in America since the elections of November 2008 as well as the likely prospects for American foreign policy, the changing relationship between the State and the market in light of the global economic crisis and the geopolitical situation regarding energy resources. 
It was considered too early to tell whether Barack Obama’s victory represents a radical shift in the balance of American political power, with the new administration backed by a real social movement, or whether it was due to a normal electoral swing that has temporarily benefited the Democrats. Obama’s peculiar characteristic seems to be his tendency to place emphasis on the personal and generational aspects of his approach to politics rather than on any customary ideological model. He has certainly demonstrated considerable pragmatism so far and will need to exercise strong leadership both internally and internationally in order to adequately deal with the many and complex problems which await him – particularly based on the fact that internal and international and regional and global factors are now inextricably linked.
In keeping with this unquestionable interdependence, the discussion touched on various diplomatic and regional security issues, such as Afghanistan and Pakistan, the Middle East and the role of Iran, and the uncertainty regarding the changing role of Russia and the future of NATO.
It was observed that the economic crisis will be the area on which the United States – as well as Europe and the rest of the world – will need to concentrate as a priority. For the time being, the major concerns are the effectiveness of measures to boost consumption and revive credit flows, almost unanimously considered essential, despite the risk that policies largely Keynesian in nature may produce undesirable effects and distortions in the medium term. For the United States, a phase of quite significant deficits seems inevitable, accompanied by protectionist drives that could spread to other economic regions. 
Alongside the necessary national measures, the participants observed that efforts will need to be made to improve international coordination and to bring about comprehensive reform of the economic and financial rules and key institutions. This presents a particular problem for Europe – given its structural requirement for collective decision-making – which at the moment seems to be mainly dealt with by means of ad hoc agreements that are partly informal. 
It was acknowledged that the relatively high prices of energy products was one of the contributing causes of the economic crisis, having introduced a significant degree of volatility. Prices do not only respond to market logic but are also heavily affected by geopolitical considerations and initiatives. This is demonstrated clearly by Russian foreign policy, but also, for different reasons, by the case of Iran. A wide consensus has now emerged on both sides of the Atlantic regarding the need for a mix of policies on conservation, diversification and investment in renewable sources. The participants felt that while it will by no means be easy to find the resources to implement these policies in the midst of a recession that promises to be long-lasting and severe, conditions do exist that would permit a partial reconversion of production models. The contribution of Europe and America will be crucial, including with a view to both of them learning some useful lessons from each other.