The Financial Times’ long-standing chief economics editor, Martin Wolf, has weighed in with a new piece, The EU’s future in a world of deep disorder.1
While Wolf raises some useful and important questions, he also unwitting reveals the depth of cognitive capture in the West about America’s conduct. Henry Kissinger gave the geopolitical version of a black-box warning when he said, “To be an enemy of America can be dangerous, but to be a friend is fatal.” Even with the danger of being close to the US more apparent than ever, Wolf seems unable to recognize how its desperate efforts to preserve its unipolar status are increasing instability.
Wolf’s organizing theme is that Europe needs to decide whether to be an ally, a bridge, or a power. But for starters, what is this “Europe” of which we speak? Is it the European Union or the Eurozone? Wolf does acknowledge:
The British diplomat Robert Cooper argued that “what came to an end in 1989 was not just the cold war or even, in a formal sense, the second world war . . . What came to an end in Europe (but perhaps only in Europe) were the political systems of three centuries: the balance of power and the imperial urge.”
Nobody acquainted with the history of Europe should be in the least surprised by the desire for a different way for states to behave and relate to one another. Indeed, one would have to be an imbecile not to understand it.
Some of the problems the EU faces derive from the fact that it is a confederation of states, not a state. The difficulties of managing divergent economies within a monetary union are an inevitable result.
At the risk of disagreeing with Cooper when I have not read his full argument, I have trouble with his balance of power claim. Europe was devastated after World War II. European countries lost significant sovereignity via the US creation of international institutions and the establishment of NATO. There were some instance of forceful efforts to shore up national independence, notably with DeGaulle. But starting with the establishment in 1951 of the European Coal and Steel Community, the trend in Europe was towards economic integration. At a minimum, the hope was that joint prosperity would promote peace and could foster political integration.
Remember that the US taking on much of Europe’s security costs was also a subsidy to their economies. Recall Trump caused a furor when he said it was time European countries that they needed to shoulder their 2% of GDP defense commitments, as agreed by NATO defense ministers in 2006. A knowledgable colleague says that only the UK has looked like it is meeting that spending level, and even then, that’s with funny accounting.
A big problem with “Europe” is financial, that it is not fiscally integrated and therefore lacks meaningful federal-level spending to reduce economic difference across the continent and some commonality of programs. But another issue is cultural divergence. Europe has at least three or four cultural clusters: Southern European/Latin, Northern European/German, Easter European, and Nordic. These do not seem to have assimilated during their time under the EU banner. Wolf makes a passing mention of nationalism, as if that’s an external threat by among other things reducing openness of markets, which hurts the EU. But he ignores the centrifugal force of nationalism within the EU, with Poland’s rebellion against the EU judiciary temporarily ignored as the Poland plays yapping chihuahua against Russia, while Hungary’s stroopiness is held even more against it for not falling in line with all matters Ukraine.
But the striking part of Wolf’s piece, at least for careful readers, is the blindness to the degree to which the US has made the Europe’s woes worse. Wolf talks about Europe being an ally, by implication with the US and US stalwarts in the Pacific. But allies operate with each party’s interest in mind, even if there is a lot of push and pull. Wolf does point out that Europe was not on board with America’s adventurism in Iraq. But it fell in with the idea of US economic sanction against Russia (recall Ursuala von der Leyen stating they’d been in the works months before the war). The initial salvo was arguably rational since no one knew then that they’d backfire. But EU leaders have kept piling on more even as the cost of the loss of cheap Russia energy does lasting damage to their competitive positions. And they resort to the canard that Russia has victimized them when they pulled the sanctions trigger, and could roll them back.
Similarly, the US is even more openly exploiting Europe than Michael Hudson warned via its Inflation Reduction Act that includes subsidies for European businesses to decamp to the US. Emmanuel Macron did bleat about that and the US selling its pricey LNG as a replacement for cheap Russian gas, but that didn’t go anywhere.
Wolf lists the threats to Europe as “economic crises, pandemics, deglobalisation and great power conflict.”
Wolf does not acknowledge that economic crises remaining a threat is to a significant degree due to the failure to enact markedly more strict regulation. Even though the US did only a so-so job on this front, Europe was far more remiss in neither meaningfully strengthening bank regulation nor addressing chronic internal trade imbalances which then lead to debt overhangs. So for Wolf to depict the risk of economic crises as some sort of act of God, as opposed to a substantially internally generated problem, is pretty rich.
Wolf also mentions climate change, pointing out that Europe has been a leader on the policy front. Here the US has been an anchor, with Obama not even joining the weak-tea Paris Accords until the very end of his term, which in turn gave Trump the procedural option to back out. The US is still deeply committed to fossil fuels, with methane-releasing fracking hardly an improvement over oil development. So the US and Europe are not on the same page, despite pretenses to paper over the differences.
As for pandemics, I am not sure how they threaten European cohesion save by stressing national budgets. Perhaps I missed it, but I don’t see Europe having the big splits that the US has had over vaccines. These seem to be more pronounced in the US and UK, which also have bigger and louder libertarian contingents than on the continent.
Trump arguably kick-started deglobalization albeit not to much benefit to the US. Pandemic supply chain interruptions made the problem more prominent, but my sense is the course changes were limited. For instance, what could automakers do about chip shortages? It’s not as if they could set up their own fabs or move their orders to other suppliers.
Readers are welcome to disagree, but some of the big drivers of deglabalization have been the US economic campaign against China, including its pretty successful war against Huawei’s 5G rollout, which has emboldened the US to try a more ambitious chips war, and of course the massive economic sanctions against Russia, in which Europe was an enthusiastic participant. Again it’s hard to see that as a development that dropped out of the sky on Europe.
As for “great power conflict,” Wolf depicts “the imperial urge is horrifyingly visible on its frontiers.”
Has Wolf looked at a map and seen that it is US, not Russian bases, that ring the world? As an economist, has he not noticed that the US has spent more on its military than the rest of the world combined, when it is protected by two oceans and not terribly rich and not at all belligerent neighbors? What is the point of all of this expenditure if not to project power?
Despite all the panic-mongering about Russia’s invasion of Ukraine, Putin has been clear since the 2007 Munich Security Conference as to what he wants: a new security order in Europe so that Russia is safe. Russia has no interest in taking Poland or the Baltic countries. Russia does not want to occupy Western Ukraine (among other problems, it would mean a huge manpower commitment and budget costs) but it does have a looming problem as to what to do about the non-ethnic Russian parts of the country. Nevertheless, the tidiest solution to Russia’s problem is to continue to bleed NATO of weapons and hamstring a threat. That outcome is still an ugly one for Europe but it is most assuredly not territorial conquest.
Wolf largely skips over China, but does suggest, not surprisingly, that Russia and China will become more closely aligned, as they have already promised, and that is likely to mean less trade with China.
Wolf concludes that admit that Europe needs to dance with the person that brung them:
Globally, it needs to decide whether it wishes to be an ally, a bridge or a power. So long as the US remains a liberal democracy and committed to the western alliance, the EU is bound to be closer to it than to other great powers. In this world, then, that makes it most likely to be a subservient ally. A role as a bridge would come naturally to an entity committed to the ideal of a rules-governed order. The question, though, is how to be a bridge in a deeply divided world in which the EU is far closer to one side than the other. The third alternative is to seek to become a power of the old kind in its own right, with resources devoted to foreign and security policy commensurate with its scale. But for this to happen the EU would need a far deeper political and also fiscal union. The obstacles to that are legion, including deep mutual distrust.
Wolf admits the most likely outcome for Europe is subservience, as has been revealed with its behavior in the Ukraine conflict. Interestingly uses “rules-governed” and not the US formula, “rules-based” order, suggesting if Europe could ever flex some muscle, it might be able to influence the rules too. What he again fails to say that Germany’s energy and economic ties to Russia could have allowed it to help form that bridge…had Merkel and Hollande been willing to deal with Russia in good faith.
In other words, Europe’s vassal status is entirely its own doing. I am at a loss to understand how European leaders played along with these development. I don’t think, generally speaking, that personal corruption played a role.
And of course, we have the elephant in the room: Europe’s deep links to the US, even if it were to muster the energy and fortitude to become a more integrated political and economic force and become perhaps not a great power, but say an India-level near-great power with the heft that big powers have to sit up and pay attention to it. But its interdependence with the US means it is more likely to share in whatever the Fates on offer for the US. I would not bet that the gods will be kind.
It’s beyond the scope of this post to chronicle how this cognitive capture of European leaders and pundits took hold. It can’t be attributed to the afterglow of the end of World War II. American cultural exports, meaning movies and pop music, played a role. The rise of a global professional class, with many educated at US and some UK institutions, helped propagate a US world view. The active seeding of US policies and even talking points via a burgeoning network of NGOs played a role. We hope to return to this important question.
1 archive.ph is your friend.