Not Just Another Recession
Why the Global Economy May Never Be the Same
It is chest-thumping time in Europe. U.S. President-elect Donald Trump, the new voice of America, has threatened the country’s allies of 70 years: Pay up or we ship out—no more freeloading on Uncle Sam. Actually, there isn’t that much left to cull, given the work of outgoing President Barack Obama, who whittled the American garrison down to 30,000, or one-tenth of what it once was.
The allies, just now coming out of shock, have gone into fighting mode, arguing that if Trump is not going to protect them (even as he cozies up to Russian President Vladimir Putin), then they must unshackle themselves from their grating dependence on the United States. Invoking the Trump presidency, the United Kingdom’s defense minister, Michael Fallon, called for “spending more.” His German counterpart, Ursula von der Leyen, wants to seize the moment, too. “Europe,” she said, “must shoulder greater responsibility.” Austria’s vice-chancellor thundered, “Europe first!” Federica Mogherini, the EU’s high representative for foreign affairs, chimed in to urge a “more effective and credible” posture, while EU President Jean-Claude Juncker said, “If Europe does not take care of its own security, nobody else will do it for us.”
NATO’s borders have always been America’s as well.
In turn, the EU Commission has proposed a five-billion-euro ($5.28 billion) fund from which member states could draw for research and re-equipment. That is a magnificent pledge of resolve, especially since the commission has pointed out that the EU as a whole has cut real defense spending by around 12 percent over the last decade. Today, it spends about 200 billion euros ($211 billion) on common defense, one-third of the U.S. total. So why shouldn’t 500 million Europeans provide for their own security, given that their combined GDP is equivalent to the United States’ and that two countries—the United Kingdom and France—field their own nuclear deterrents?
The answer, as always, is that the 28 EU members, soon to be minus the United Kingdom, are not an e pluribus unum. For a thousand years and counting, these ancient nations have not been able to achieve what Alexander Hamilton counseled in The Federalist Papers, no. 70: a strong executive who embodies the “energy essential to the protection of the community against foreign attacks” and would act with “decision and dispatch.”
Europe, then, is not best compared to the United States but, rather, to the Holy Roman Empire, with its princes and potentates and a weak emperor anointed by the empire’s grand electors. As it does today, power in those days rested in the capitals, not in the imperial court.
To be sure, there was a time when German Chancellor Angela Merkel was celebrated as emperor of the union. By dint of Germany’s size, wealth, and strategic centrality, Merkel was the obvious candidate for the throne. Who else could it have been? France has been stuck in economic stagnation, unable to reform itself. Italy, now looking at its 65th government since World War II, has been battling economic decline and ungovernability. The United Kingdom, the eternal outsider, is now set to abscond from the union for good.
But even Berlin has proved unable to impose its will on the flock. As Europe pledges to gird its loins, the latter-day Holy Empire is rudderless in a triple storm of Brexit, borders, and the faltering euro.
In terms of Brexit, the United Kingdom’s opt-out signifies a rolling back of integration for the first time ever. The EU is shrinking, and the march toward an “ever closer union” has reversed. The union will be blessed if Brexit does not infect the rest. And either way, once the United Kingdom is out, it will take a very active imagination to foresee a strategic role for the EU. The United Kingdom has always been willing to put its forces where its mouth is, intervening in Afghanistan, in both Gulf wars, and in Libya.
On borders, Schengenland, that wondrous borderless space that allowed passport-free travel from Portugal to Poland, is de facto gone. When more than a million fled the Middle East for Europe last year, Merkel pleaded with the capitals of EU countries to accept their fair share, as determined by the Dublin Regulation of 2013. Instead, those countries closed their borders or channeled the flow into Germany, which ended up with about a million refugees in 2015. National egotism has bested communal solidarity.
Like Schengenland, the euro was a bridge too far on the way to “ever closer union.” When the crisis broke in 2010, Berlin tried to impose fiscal discipline and reformist virtue on Greece and the rest of Club Med: France, Italy, Portugal, and Spain. Yet the club keeps running up deficits in defiance of what the good German doctor ordered: stop living beyond your means and gobbling up the cheap money provided by the European Central Bank. Refusing rehab, France, Italy, and the rest now clamor for more opiates. Next in line for a bailout is Italy, with an economy ten times larger than Greece’s. If Rome falls, so will the euro.
Europe remains America’s single most important strategic asset.
With the eurozone as a whole barely growing, it is hard to see how any capital will be able to confront the painful tradeoff between guns and butter in order to live up to NATO’s guideline that members should spend two percent of GDP on defense. Apart from the United States, only Estonia, Greece, and the United Kingdom have cleared that hurdle. France (1.7 percent) hasn’t, and neither has Germany (1.2 percent). Europe’s best effort is the dispatch of four multinational battalions to NATO’s eastern edge, and even that was under Washington’s prodding. That is a total of 4,000 troops—hardly a match for the 30,000 Russian ones that are said to be in the neighborhood.
To assume a strategic role, Europe will have to spend not five billion but hundreds of billions of euros for hardware and training, for planes, tanks, ships, space-based surveillance, precision munitions, interoperability, and real-time command and control. It will have to match Putin’s masterly skills at hybrid warfare. It will need the wherewithal to project power from the Mediterranean to the Baltic Sea, not to mention the Middle East.
In the fight against the Islamic State (ISIS), the old pattern prevails. If the United States leads, Europeans will tag along—but not all of them. As always, the odd man out is Germany, the richest and most populous European power that will not shed its civil religion of pacifism. In the Middle East theater, Germany’s Tornado aircraft are strictly for reconnaissance, not for bombing. The Bundestag, which must approve any intervention, is loath to project hard power.
Recall how quickly the Europeans ran out of ordnance in the bombing war against Muammar al-Qaddafi’s Libya, leaving the heavy lifting to the United States. To step up in the world, Europe needs, above all, a common will and leader. But the triple crisis at home portends less, not more, unity; renationalization is putting paid to “ever-closer union.”
Mogherini and Jean-Claude Juncker, the president of the European Commission, are not up to the task. They are not Hamiltonian leaders but officials beholden to 28 (soon 27) nation-states. Once Europeans conquered the four corners of the world; today, they take pride in the EU as an “empire of peace” and “empire by invitation.” It may take a generation to restore the continent’s old warrior culture, apart from the United Kingdom and France, which still regard force as legitimate tool of foreign policy.
So what do we do until the revolution comes? First, the president-elect ought to strike the word “obsolete” from discussions about NATO. It would be a colossal disaster if Trump made good on his threat to retreat into Fortress America. Hard put to organize its own defense, Europe would lose, but so would the United States. For NATO’s borders have always been America’s as well.
Nor is the United States simply doing Europe a favor when it keeps its strategic umbrella in place, as it has done ever since the mid-1940s. Europe remains America’s single most important strategic asset. If Trump does cozy up to Putin, the Europeans, suddenly feeling vulnerable, will surely engage him in a race to Moscow, seeking to appease the Kremlin and to forestall a U.S.-Russian deal over their heads. Even now, they would be only too happy to shed the sanctions imposed over the Crimean land grab. But it would not serve American interests to allow Putin to dictate the terms of the relationship with both the EU and the United States. To deny Moscow such a dominant position was the overweening objective of all administrations, Democratic or Republican, since World War II.
The simple strategic point is this: it is always better and cheaper to stay in place rather than having to fight to return. Recall the United States’ bout of isolationism after World War I and the enormous toll in lives when it had to re-engage on D-Day and then slug it out until the Third Reich’s surrender. Recall also the Cold War, when the U.S. military presence underwrote Europe’s “long peace.” To ditch the European allies would be folly to the max. The president-elect seems to have grasped that point, at least as presented by Obama on November 14, after his first meeting with Trump. According to No. 44, Trump “expressed a great interest in maintaining our core strategic relationships,” including a “strong and robust NATO partnership.”
Although secondhand, that report rings true. “Those aspects of his ... predispositions that don’t match up with reality he will find shaken up pretty quick, because reality has a way of asserting itself,” Obama said. “This office has a way of waking you up.” And that explains the “enormous continuity ... that makes us that indispensable nation when it comes to maintaining order around the world.”
These are wise words from the 44th president, who started out by prescribing retraction, disarmament, and retrenchment and then reconsidered by putting troops back into Iraq and Europe. Reality does bite. If No. 45 actually does abandon Europe, the nation’s first line of defense, he will not make America great again—he will make it small. And Russia and China will be cheering.