Europe as a Global Player
The European Union’s (EU) internal struggle over immigration, its financial woes, and the confrontation with U.S. President Trump over trade signal that Europe’s post-Cold War idyll is over. This analysis by Geopolitical Intelligence Services presents Europe’s situation and Europe’s choices.
The world’s richest continent cannot hide from history, even while protected by the leading superpower, the United States.
There have been plenty of warning signs. The 2008–2009 financial crisis showed the vulnerabilities of the euro area’s stagnant economy—overregulated, overtaxed, and overburdened by bloated welfare states. The inadequacy of the European Union’s foreign and security policies was exposed by the twin shocks of Russia’s intervention in Ukraine in 2014, followed by and the great migrant influx of 2015.
“The polite pretense that the EU is only a benign, inward-looking … construct seeking the integration and well-being of its members should have been put to rest with the events in Ukraine,” GIS expert Bernard Siman wrote. “It ignores the simple truth that once created, a geographically coherent bloc with 500 million inhabitants, located at a geopolitical crossroads, must have a profound impact on others.”
In today’s less stable geopolitics, marked by the rise of China and Russia’s attempt to “claw its way back to the rank of a major Eurasian power,” the long-term risk of war is rising, GIS founder Prince Michael of Liechtenstein noted. In this context, Prince Michael wrote, “Europe has developed an identity problem: It haplessly bounces back and forth between … its traditional vector toward the North Atlantic and the United States in the West and toward Eurasia in the East.”
One reason for this vacillation is that the EU has not built up diplomatic and military strength commensurate with its economic power. The essential absurdity of this situation was summed up by Prince Michael: “Some 500 million Europeans now need 350 million Americans to defend them against 140 million Russians.”
Looking for Uncle Sam
Europe’s dependency on the American security umbrella has become problematic as the United States reorients its global priorities. This process began long before the Trump administration or President Barack Obama’s “pivot” to Asia, as the waning of the Cold War (1947–1991) meant the reduction of U.S. forces in Europe.
Even so, as GIS expert Luke Coffey pointed out earlier, “what has not changed is Europe’s geopolitical significance.”
“From the Arctic to the Maghreb, from the Caucasus to the Levant, the continent borders on some of the most important conflict areas in the world,” Coffey wrote. Russia’s move into Ukraine prompted the United States to reverse course and redeploy light forces to the Baltic states with its NATO allies.
But Trump started a debate about the cost-effectiveness of the U.S. commitment to European defense, especially if NATO allies do not pull their weight. He also pulled out of the landmark project to create a transatlantic free trade agreement (TTIP), provoking German Chancellor Angela Merkel’s uncharacteristically harsh remarks that “the times in which we can fully count on others are somewhat over,” and “we Europeans must really take our destiny into our own hands.”
In fact, there is considerable evidence the Trump administration will not depart from traditional policies toward Europe, even if its approach is more abrasive. As GIS expert James Jay Carafano pointed out, the United States remains committed to NATO and is not out to deconstruct the EU, even though it is taking more of a bilateral approach and “using much more combative economic policies.”
As GIS expert Michael Wohlgemuth wrote in an overview of the transatlantic relationship, the tensions could even yield a better, more balanced relationship, provided Europe grows up.
Soft Power Limits
While Europe is seeking to become a world leader through the exercise of soft power, its “defense policy and its striking absence of military power is failing to frighten anyone,” noted GIS expert Charles Millon. While the defense spending of EU countries is about 40 percent of the U.S. level, it achieves only 10 percent of the operational capacity. This condemns Europe “to bow to U.S. policy, which does not necessarily line up with its interests.”
This EU approach ran into its hard limits in Ukraine in 2014, according to Millon:
Another sobering “experience of the narrow confines of European defense” was the Libyan revolution of 2011, as GIS expert Uwe Nerlich noted. After the decision by France and Italy to intervene, the whole air campaign quickly showed its utter dependence on U.S. logistical and command support—and failed to achieve its objective of stabilizing the country.
Chaos or Flexibility?
The obvious reason the 28-member EU cannot behave like a conventional great power is its complex, multinational structure. As a result, “neither its individual member states nor the bloc as a whole possess the capacity and authority to react effectively to global threats,” as Nerlich wrote in a December 2016 analysis of the emerging European Global Strategy (EGS). Even its largest states lack resources to act as a great power, while the union has been deliberately deprived of wide authority on defense and foreign affairs.
The alternative, according to Nerlich, is cooperation of larger European powers and regions in groups below the union level. The most spectacular examples are the euro area and the European Defense Union, to which could be added “formal” diplomacy, regional coalitions, and bilateral “enhanced cooperation” on military matters.
While the proliferation of special-purpose groups is often seen as a threat to EU cohesion, Nerlich argued it could strengthen the bloc while empowering its member states—many of whom fear the centralized power of union institutions and the popular backlash it provokes. “Flexibility is a powerful tool in building competitiveness, and it could well become Europe’s essential organizing principle” in its response to global rivals, Nerlich wrote.
Not surprisingly, this view is endorsed by some of Europe’s traditional powers, especially France. GIS’s Charles Millon—a former defense minister under French President Jacques Chirac—argued in 2014 that Europe can only hope to project power abroad if it creates “several circles of integration,” which would allow an “inner circle of France, Germany, Italy, the Benelux countries, and Spain” to pursue “common foreign objectives” independent of NATO.
Europe’s initial goal would be to “pacify its close neighbors,” especially in Africa and the Middle East. This requires not technology or even military capabilities in the first place, “but rather the political will to intervene in the wider world. … The means to achieve this will follow.”
Gen. Stanislaw Koziej further explored the European security doctrine, noting that the European Global Strategy approved in 2016 stressed “principled pragmatism” that attempted to “steer clear of isolationism and primitive interventionism alike.” Koziej tends to be an optimist, writing that the EU had “made a long, slow journey toward becoming a real player in security strategy.”
But for now, the risks seem more apparent than the opportunities. Brexit will remove Europe’s biggest military and half of its nuclear deterrent from the EU, though some believe it could encourage a more active British role in NATO. Yet both sides have bungled a chance to soften the economic blow of the UK’s withdrawal in exit talks, as GIS expert Michael Leigh noted in February 2018. Within the EU, there is an ever-deepening north-south divide over finances, now combined with an east-west split over migration and the rule of law.
Even so, disagreement and divergence have been the norm in Europe and even in transatlantic relations, as Wohlgemuth pointed out in January 2018. Europe’s strength is its ability “to pool resources, coordinate efforts, and agree on common objectives,” even if the process is slow and cumbersome. That is a useful skill on the world stage, especially if Europe sees its role as a defender of the multilateral structures of the post-Cold War order.
In November 2013, Nerlich laid out Europe’s defense options: “more of the same,” “regional capacity for intervention,” “oceanic outreach,” and “global strategic power.” He argued that in the long run, the third or even fourth options were called for. But four months before Russia’s annexation of Crimea, Nerlich wondered whether this sort of pivot was even possible.
Over the next five years, Europe reoriented itself away from the expeditionary-based concept used in Iraq and Afghanistan and more toward self-defense, both against terrorism and territorial aggression. This was primarily in response to Russia’s strategic challenge to NATO and EU expansion, which began in Georgia in 2008 and deepened in Ukraine in 2014.
It also ramped up military spending, mostly on home security and badly neglected conventional forces. But even this limited push to improve existing capabilities did “not overcome the fundamental problem, which is that Europe’s armed forces are designed to operate in an American framework that relies on U.S. headquarters, long-range strike capabilities and logistical support,” GIS expert Professor Mikkel Vedby Rasmussen noted.
Four years after the 2014 NATO summit in Wales, seen as the turning point in strengthening Europe’s defenses, only five European members of the alliance—Estonia, Poland, Greece, France and the UK—met the defense spending target of 2 percent of gross domestic product, as GIS expert Stefan Hedlund noted. Germany—the butt of President Trump’s complaints about free riders— spends just over 1 percent.
Europe is also uniquely vulnerable to a shift in Russian military doctrine, which adjusts for NATO’s superiority in purely conventional forces with a willingness to make first use of low-yield nuclear weapons on the battlefield, Hedlund wrote in April 2017. This strategy of “escalate to de-escalate” can only be countered by comparable Western capabilities, which even the United States has neglected. The nuclear forces maintained by France and the UK are purely strategic deterrents, without low-yield tactical weapons, as Koziej noted in May 2016.
Unless these capabilities are modernized, European military planners are left with the unpalatable choice of either backing down after Russian first use or triggering a huge nuclear exchange.
Economically, the EU is a colossus with its 2017 GDP of $17.1 trillion, second only to the United States. Its internal market of 500 million consumers is, for many, the world’s most attractive, giving the bloc tremendous business leverage. This has become a go-to option for European policymakers.
In some ways, the bloc’s accomplishments have been impressive. Europe has made more progress in negotiating so-called free trade agreements (FTAs) than the United States, often to its advantage. It could well take the lead in shaping future world standards if the United States drops out, noted Wohlgemuth. But the bloc has shown no hesitation to use bare-knuckle methods of its own, aggressively going after U.S.-based multinationals on a variety of consumer protection issues, most recently the security of personal data.
But this can be a double-edged sword, as many of these actions by regulators can be seen as “a European measure against American firms’ dominance in digital commerce, especially companies like Apple, Google, Facebook, and Amazon,” as Prince Michael noted in a June 2018 comment. Like straight-up protectionism such as the threatened retaliatory measures against U.S. aluminum and steel tariffs, they do not improve competitiveness and end up hurting Europe’s already sluggish growth, damaging economies, and costing jobs. In this sense, the EU’s trade leverage has led to little gain.
A potentially more compelling example of using economic power has been the EU’s efforts to diversify away from dependence on Russian gas. This has primarily been through a combination of regulatory pressure (third-party access laws) and infrastructure projects to bring new supplies to Europe, as through the EU’s Southern Gas Corridor from the Caspian Sea to Italy. But Europe has been inconsistent in applying pressure, and market forces have proved more decisive as Russian gas is simply cheaper.
Falling energy prices, sluggish European demand for gas, and surging exports of LNG from U.S. shale producers have done more than investments to loosen Russia’s grip.
The EU’s cohesion funds and ability to tap the European Investment Bank (EIB) and other multilateral lenders give it an enormous ability to upgrade infrastructure. This has spurred economic growth in the bloc’s new eastern members, and could potentially allow the EU to “project force” through development initiatives in Eastern Europe and North Africa.
Given its potential to hand China an “unacceptable level of control over a large trading area,” European policymakers must decide how to respond, GIS expert Enrico Colombatto noted in a January 2018 report. Despite its lack of progress, China’s “One Belt, One Road” initiative could put European companies at a severe competitive disadvantage. Yet not taking part could be even worse, as then “Chinese bureaucrats will be the ones coming up with the ideas,” according to Radoslaw Pyffel, Poland’s representative at the Asian Infrastructure Investment Bank.
Astonishingly, Europe’s role in these developments—so important economically, politically, and strategically for the entire world—has been virtually nothing. At stake are Europe’s links to what will soon be the largest markets on the planet. Yet Europe is as passive today as China was in the 18th and 19th centuries, when Europe occupied most of Asia.
Geopolitical Intelligence Services is a research firm based in Liechtenstein. This article was first published by GIS Reports Online.