April 15th, 2011
02:20 PM GMT
French President Nicolas Sarkozy had a grand plan in mind to make the Union of the Mediterranean a hallmark of his rotating EU Presidency in July 2008.
The math was simple, the scale grand, up to 44 nations of Europe, Middle East & North Africa that, among other things, would foster trade with the Mediterranean Sea as its center of gravity.
The French President wanted to expand the original plan launched in the mid-nineties under what is known in Brussels as the Barcelona Process. The policy structure under the title of the Euro-Med was in place, but the actual building of this economic blueprint never got off the ground.
Florence Eid, Chief Executive of Arabia Monitor in London says the ambitions were big, but that the European Union did not deliver on its promises.
"Trade between Europe and the various southern shores of the southern Mediterranean remains at 10 percent of European trade, that is a paltry number given that you have 300 million people at its doorstep," says Eid.
Stretching from Morocco in the West and Lebanon in the East, this could be a market of three-quarters of a billion consumers with the EU, Middle East and North Africa combined. But in a post 9/11 world, analysts say Europe focussed instead on security and a desire to slow down the flood of immigrants from North Africa.
Putting business lower down the priority list led leaders like Italian Prime Minister Silvio Berlusconi to focus on their own bi-lateral deals. With its position in southern Europe, Italy has tried to use its historical ties to secure oil and gas from Libya. Now policymakers throughout the region are looking to the European Union to come up with a strategy to stabilise North Africa and create a real trade zone for the Mediterranean.
In the wake of the Arab uprisings Europe is now seeking to revise its Euro-Med policy so it's not seen to be what it calls a "passive spectator" in the region. European Central Bank chief Jean-Claude Trichet says it is important the southern players of Europe don't dominate the process, as they did in the past. Trichet, based in Frankfurt, has adopted a broader view of European affairs on the soil of German Chancellor Angela Merkel.
"I trust that cooperation between the north and south Mediterranean countries is absolutely essential, that is clear,” said Trichet during an interview in the council board room at ECB headquarters. “But all European countries are in even those who are not Mediterranean countries and that is important."
During discussions surrounding the Union of the Mediterranean, Chancellor Merkel wanted to ensure that it was not only France, Italy, Greece and Spain shaping policy. Not surprisingly, the issues of Israel and Palestine complicated matters and Turkey was highly concerned the Union of the Mediterranean would be used as a Trojan horse to skirt its eventual membership talks into the EU.
While Europe is currently hamstrung by debt problems and bailouts, investments from the oil-rich Gulf States into North Africa have created an Arab regional market led by the private sector. The region’s global share of foreign direct investment went from a paltry 0.6% in 1998 and a more respectable 7.7% a decade later due in large part to the flows from the Gulf to North Africa. Prior to the uprisings, Egypt, Morocco and Syria were popular investment ports of call for the Gulf based trading families.
Strategists like Florence Eid call this a new paradigm. The private sector has advanced ties for the six members of the Gulf Cooperation Council (GCC) who are being less passive as a result on regional affairs. Qatar and UAE involvement in the enforcement of the no-fly zone over Libya is sample of that engagement, she says.
“The trouble with the first iteration was that it was led by the Europeans and North Africans were mostly the counterparty. Now for it to work it has to have leadership from the Arabs as least equal to the European leadership.”
The key now is putting the politics of who leads aside to inject funds into a region which needs to rebuild and most importantly create jobs.
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