EMAIL DETAILS

Dear Friends and Colleagues,


In case you missed it, below is a link to an article Sally Painter,
Co-Founder and COO of Blue Star Strategies, wrote on the importance of
emphasizing our transatlantic relationship in the SOTUS.


With warm regards,


Blue Star Team


http://trumanproject.org/doctrine-blog/in-crisis-and-prosperity-europe-a
nd-the-us-are-bound-together/


In Crisis and Prosperity, Europe and the US Are Bound Together


By Sally Painter | 2.12.13

As President Obama takes the podium for this year's State of the Union,
America faces no shortage of crises. A plethora of challenges will
compete for attention, and the president will be under pressure above
all to address the continued weakness of the US economy.

He will surely tackle the raft of fiscal emergencies looming just over
the horizon, which already threaten our brittle recovery. After feverish
negotiations to avoid the "fiscal cliff" of tax increases and spending
cuts, lawmakers succeeded only in kicking the can down the road. If
Congress doesn't act by March 1, the "sequester" of draconian
across-the-board cuts will kick in.

If this happens, economists estimate it will cost the economy 0.7
percent of GDP growth and a million fewer jobs. This, combined with the
debt ceiling fight - the US government is only authorized to continue
paying its bills through March 19th - and urgent reforms on gun control,
immigration and climate policy will occupy much of the speech.

Missing, however - as it was through most of the 2012 election season -
is the importance of the transatlantic partnership between Europe and
the US. This relationship has receded from the headlines as well as the
attention of policymakers as the worst of the EU crisis appeared to
subside, and the Obama administration set about making its "pivot"
towards Asia. Yet the US and Europe need each other more than ever,
despite - or, indeed, because of - their respective crises.

The European project is at a crucial stage of development. The acute
panic of the past summer, when bond yields were surging to unsustainable
levels and Greece's political collapse seemed imminent, has settled into
an uneasy economic stasis. The European Central Bank calmed the markets
with a commitment to unlimited sovereign bond-buying, and governments
were able to push through unpopular fiscal reform measures.

The underlying issues, however, have not yet been resolved. Renewed
signs of political turmoil in Southern Europe show just how fragile the
status quo is. Spain's Prime Minister, Mariano Rajoy, is facing calls to
resign over illegal use of political funds, while in Italy the
iconoclastic former Prime Minister Silvio Berlusconi is threatening a
political comeback. These events are causing bond yields to rise again,
and a protracted recession will continue to break balance sheets: the
IMF estimates that the Eurozone's output will shrink 0.2 percent in
2013.

Given this reality, failure to forge a clear, credible and timely pact
in the direction of a political union may mean a smaller Eurozone and,
eventually, a smaller Union - for all intents and purposes, the failure
of the European experiment. Not only must Europe find a way to return to
growth, but it must also demonstrate a commitment to deeper integration
necessary to make a united Europe sustainable.

The implications for the US are enormous. In matters of national
security, a strong NATO is a linchpin for a secure America and a stable
world. From terrorist threats to complex logistical operations in
Afghanistan and Libya, the US has benefited from working closely with
its NATO allies, and must continue to do so.

Economically, for both the US and Europe the path towards expanded
prosperity lies in closer cooperation, and the president should push the
US-EU Free Trade Agreement currently under discussion. Transatlantic
trade accounts for over $600 billion - some 40 percent - of global
commerce, and the European Commission estimates that eliminating tariffs
could increase it by 50 percent.

Not only would such an agreement go far towards President Obama's goal
of doubling US exports, but it would also increase transatlantic GDP by
nearly 2 percent. In tying the two economies - and currencies - more
closely together, such an agreement would be a major step towards a
renovated Bretton Woods-style framework to lay the foundation for a new
era of growth and stability.

The US can take other mutually beneficial steps to bolster the European
economy - and improve its own. The Visa Waiver Program, for instance,
streamlines the ability of our closest allies to visit the US. Key NATO
allies, such as Poland, Bulgaria, Romania and Croatia, have completed
the security requirements to join the program.

Congress, however, has put the program's expansion on hold. This delay
has unfortunate implications not only for our allies, but also for the
US economy - in 2010, visitors traveling on visa waivers spent nearly
$61 billion, directly supporting over 400,000 jobs and generating $9
billion in taxes.

Nor is this politically controversial - to the contrary, European and US
publics appreciate the importance of this partnership. The 2012
Transatlantic Trends survey shows that a full two-thirds of Americans
and Europeans think that the regions' shared values and interests should
mean closer cooperation. Europeans continue to support the Union, and
publics on both sides of the Atlantic agree that the US-EU relationship
is more important to their respective national interest than any other.

Amidst all of the pressing priorities, President Obama's address should
clearly recognize that support for the European project is critical for
our shared prosperity. While Europe struggles to develop a credible long
term path for its future, US support is as critical now as it was at
other crisis points of the past century. Our fate - and potential for
success - continues to be bound together.

Sally A. Painter is on the Board of Directors of the Truman National
Security Project and is Co-Founder and Chief Operating Officer at Blue
Star Strategies, LLC.