The Walls We Build Ourselves

15. 3. 2017

We see around us a fracturing of Europe, and perhaps more broadly even of liberal democracy. We are figuratively as well as literally building new walls where we should be enjoying the freedom so many people fought for so long to achieve instead.

Six years ago on the 20th anniversary of the Fall of the Berlin Wall, I was to present Václav Havel with the Atlantic Council’s Freedom Award, but unfortunately his health didn’t allow him to come pick it up. Yet I recall the celebratory mood, where despite the economic crisis we faced then, we were still hopeful, we could still rejoice in the absence of walls. We had a free and open Internet, open borders between our countries. And liberal democracy was still taken as a given in Europe.

We see around us a fracturing of Europe, and perhaps more broadly even of liberal democracy. We are figuratively as well as literally building new walls where we should be enjoying the freedom so many people fought for so long to achieve instead. So I suppose the title of my talk should be “The Walls That We Build Ourselves.”

Today we are still dazzled by part of this freedom, the technological side. Every day we read of some new digital development to makes our lives easier and more convenient. I shall not give you statistics on how much of the world today is IT-based, it suffices to know that 106 billion e-mails are sent each and every day. So we have seen a momentous revolution in 25-odd years since Tim Berners-Lee invented the hypertext transfer protocol or http, at the beginning of every Internet address, a revolution that even dwarfs our own momentous revolutions in Europe. This revolution also alters our geography, our mental geography (to borrow a term from Milan Kundera), as well as our own place in Europe and in the world.

If Europe is to remain part of the digital revolution, we need to make most of it and look beyond our national borders. We have lost our physical borders with the Schengen Agreement; we have eliminated, with the Single Market Act, borders for material goods, and all of this has been possible because we are liberal democratic states that understand that the prosperity we all desire comes from eliminating barriers. The digital revolution has also altered, as I said, Europe’s mental geography. No longer is my country considered a poor, former-Communist Eastern European country, backward and provincial, but rather one of Europe’s most technologically advanced.

Yet some barriers remain and new ones are being added. In the digital world, the world we live in today, Europe has not done what needs to be done in order to compete. It is easier to ship a bottle of wine from the Algarve in Southern Portugal to North of the Arctic Circle in Lapland than it is to buy an iTunes record across the Czech and Austrian border. And that’s true for every country, every border within Europe. IT-based service companies must adopt and adapt to 28 different taxation, consumer protection, and copyright regimes. The most cutting edge companies and digital services do not even bother with small countries like mine, because it is too complicated, too much work to do business there, and so we end up even worse off. Another result is that European start-ups have a much more difficult task to face—the choice whether to grow slowly in Europe or to expand quickly in the United States, where federal or national law takes care of a market with 320 million customers.

So ICT development is not by default a road to success. Those who make the most of it will take its dividends. Those left behind will pay a high price. Annually, the percentage difference in growth between the US and Europe due to use of ICT in the United States—or the lack of thereof in Europe—is 0.3 percent. The European Commission says that the annual cost of Europe’s fractured digital market or waste is 340 billion euros a year. It is also a fact that out of the 20 largest Internet companies, 14 are American and almost all of the rest are Chinese. Worse, the presence of borders is accelerating the widening of the gap. While in the analog world change tends to be linear, in the digital world change is exponential, as is captured by the empirically derived Moore’s law that states that every year and a half the computing power of a chip will double.

So we in the EU are lagging behind and the Harvard Business Review recently claimed we are even stalling out. The high-speed train of the digital economy is accelerating without the EU at the controls and nobody will wait while we get our market/house in order.

Our challenge in Europe in an era in which people and businesses themselves are moving rapidly ahead using IT, is that much of what concerns governments and parliaments is falling ever further behind changes in the actual behavior of people. Billions of people upload their personal data on their iPhones and on their digital machines without even giving it a second thought. Cross-border data flows have become essential elements of today´s economies and innovation. Big Data offers a real-time analyses of processes that in the past we only modelled statistically. More companies depend on cloud services, or platforms based on such services. Yet we seem to think this is all an “American thing.” The free flow of data is not just a concern for American companies—the largest exporter of digitally deliverable services isn’t the US, it’s Europe.

These rapid changes in our digital behavior prompt conflicts between our laws and the needs of the global European economy. Take the recent landmark judgment on online privacy by the Court of Justice of the EU. An Austrian law student won a legal challenge to the EU-US Safe Harbor privacy principles that provided companies the means to transfer personal data between the US and Europe. After Edward Snowden’s revelations in 2013, which leaked practices of mass surveillance by the NSA, the student asked the Court to prohibit Facebook Ireland from transferring his personal data to the USA. The Court found that such data transfers violate the EU´s legal standards for data protection by “compromising the essence of the fundamental right to respect for private life,“ and thus declared Commissions’ decision on data transfer based on the EU-US Safe Harbor agreement illegal. In other words the legal basis for such data transfers was annulled.

What to make of this? On the one hand it shows the strength of European rule of law: that one person in the European Union can enforce his right to privacy and overturn a huge process. On the other hand, the decision threatens to slow down a thriving transatlantic digital economy. Many multinational companies will need to rethink how they operate because overnight they have been forced to find an alternative mechanism for their data transfers to the US. This will be particularly hard for smaller companies on both sides of the Atlantic, which depend on cloud services. Equally worrisome is that policymakers in other capitals, from Delhi to Brasilia, may see this as an excuse to further limit their own cross-border data flows, hurting both the European and American economies and the open Internet as a whole.

To solve these problems, Europe and the US will need to show each other the mutual forbearance of close friends. Data protection and digital opportunities are not mutually exclusive. To enhance both we need strong leadership and often rapid and courageous policy decisions. We are in dire need of rapid EU Data Protection reform and urgently need 28 National Data Protection Authorities to coordinate their actions to avoid further fragmentation. Let us hope that the negotiations to update the data transfer framework between European Commission and the USA will succeed. We need convergence between US and European approaches, to set a global standard for how open liberal internationalism can function in the 21st century.

Part of the problem is more broadly described in C.P. Snow’s “Two Cultures” essay, but writ large, writ global. Snow was a literary novelist and a physical chemist at Cambridge University who described how at the faculty club, he could sit at a dinner table with physicists and chemists and discuss the developments in their field, but he could also drink with the poets, novelists, and Shakespeare scholars at their table. However, he was the only one who could sit at both tables, think in both cultures, both worlds.

I maintain that what 65 years ago was a problem in universities, is today a problem for liberal democracies. Societies have become so imbued with (and dependent upon) technology that our policymakers, our legislators, and courts on one side, and programmers, engineers, and entrepreneurs on the other no longer understand the full implications of what they do. For a geek, a new way to harvest previously unavailable data is a discovery and possibly a highly lucrative one. For some lawmakers who, like one I met, asked me what two to the third power was, when I talked about Moore’s Law, technology is some mysterious and magical world that will rob us of all our privacy and human rights.

We will have to go beyond the agenda of simply utilizing technology and making the Internet universally accessible. Today at one table sit the geeks. They look around and say, “Cool, look what we can do! We can sneak in and do this, or that and that, without giving a thought to the principles of a democratic society.” Then you have people who have not studied math or science since middle school, for whom anything IT related is complicated and something to fear. This all obviously has major implications for our educational system, but this would go far beyond my talk today. In any case, this too, the wall between the world of science and the world of the humanities, is a wall that is separating us ever more in our modern liberal democracies. I need not point out that ethics in the modern Internet age is not too much of a problem in authoritarian societies, which often are no less advanced in technology than we are.

To create and maintain a competitive, prosperous, and secure Europe, we face challenges not only in the field of economy and IT, but also more broadly both in foreign and domestic policy.

The crises we have faced since the 20th anniversary of the fall of the Wall highlight the EU’s limits in working speedily together. This is not to say we are unable to work together. The unprecedented and historic consensus in response to the grave violations of international law in the Anschluss of Crimea shows Europe can work when need be. The precise, even surgical sanctions have been successful. We have increased the cost of aggression and firmly responded to violations of international law such as the United Nations Charter, the Helsinki Final Act, and the Paris Charter, which are the foundations of security on our continent. Yes, we are still in the early days of the sanctions, and sanctions are a policy tool that often brings few visible results overnight. We have seen this in the case of Iran. Thus, we need strategic patience within the EU. For we also know from our continent’s history that turning a blind eye to aggression leads to far greater tragedies in the future.

What we need as well is strong deterrence in addition to the dialogue. Dialogue itself is not a policy. NATO Allies have reacted promptly to changes in the security architecture in Europe after the aggression in Ukraine and in response to a military build-up and provocations beyond its borders. The recent military escalation in Syria demonstrates yet again the need to further adapt to a new and changing security reality in and around Europe. We must move forward, improve our readiness and responsiveness. That is, we need to create a credible deterrence that sends a clear message to any potential aggressor. We need a long term strategy for long term problems. We need to admit that we have been too slow to recognize how much has our environment changed.

What will follow next? We do not know. We all have much to lose from a crumbling liberal international order.

Conflicts in our neighborhood also affect us more directly, our own societies and politics. The conflicts in Syria and Libya have set in motion a series of dominoes: conflict, refugees, massive movement of peoples escaping the violence… to Europe. This, I worry, is changing the landscape of European democracies. We are witnessing rising support for far right or far left political movements, often fueled by anti-immigrant, racist sentiments. Short-sighted, populist policies exploiting the fears of ordinary people will lead us, I fear, back to the 1930s. Our much-vaunted tolerance is evaporating, replaced too often by the sneer of a street thug. Politicians are using language that a few years ago appeared only in anonymous commentaries on the web.

Moreover, some say the migration crisis within the EU has a human face, others see just an Eastern European one, that is to say, this crisis has revived old stereotypes of an Eastern Europe stuck in backwardness and xenophobia, a stereotype so many of us have labored for so long to overcome. I know all too well our way to the EU and NATO, the hard work it required, including convincing Western Europe to overcome ignorance, stereotyped perceptions, and sometimes plain arrogance. I would not want to see the momentous achievement of EU´s enlargement to the Central and Eastern Europe undermined by this crisis.

This is not to say that concerns and discussions in our public are not to be taken seriously or into account. To the contrary, we have painful debates, where various values either become mixed or clash with our tragic historical experience and demographics. Fear is often understandable because of lack of experience and encounters with people from other religions and cultures. In this way it all is quite different from our Western neighbors’ experience and thus demands careful attention and mindful considerations, not only by the media, but also at the negotiation table in Brussels.

We joined the EU and NATO more than a decade ago and now are full partners in deciding Europe’s future. We are also Stammkunden or regular consumers of solidarity. Just to name a few: air policing, “borderless” travel within the EU, career/work possibilities across Europe, not to mention that an entire generation of our youth has benefited from scholarships for studies abroad. The migration crisis is the first time since the accession that serious solidarity, and a significant contribution from our side, is expected. We must act and contribute responsibly, for it is our common interest and cause. Small wonder then, after all that we have received from the EU, the freedoms and prosperity, that when we refuse to help out others in difficulty we see a return to old stereotypes. We want to build walls around us to keep out refugees, not realizing that we are rebuilding walls we so desperately worked to tear down.

Winston Churchill, arguing for European integration, said in 1946: “Small nations will count as much as large ones and gain their honor by their contribution to the common cause.” Let us then gain our honor.

Toomas Hendrik Ilves

Fourth President of the Republic of Estonia, in office since 2006. He worked as a diplomat and journalist, and was the leader of the Social Democratic Party in the 1990s. Ilves served several times in the government as Minister of Foreign Affairs.

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