The Belgian economist André Sapir used a background paper for the September 2005 informal summit of the European Union’s economic and finance ministers to make a provocative claim about the European social model: Europe’s heads of state and government do not need to choose between equity and efficiency or between a welfare state and a market economy; with the right reforms to welfare programs and market institutions, it is possible to have both equity and efficiency at the same time. The British held the rotating presidency of the Council of the European Union and were quick to take up Sapir’s challenge. The quest to achieve both equity and efficiency moved to the heart of efforts to relaunch the Lisbon Strategy and to re-energize the European project. Unfortunately, these efforts were soon overtaken by events.
As candidate, Donald Trump made a number of comments about the utility of the North Atlantic Alliance and about the virtues of European integration that left many in the establishment scratching their heads. When he was elected President of the United States, Trump did very little to soften his tone. On the contrary, the Trump White House floated the names of potential ambassadorial appointments who talked about the transatlantic relationship and the European Union in even more disparaging tones. Of course, this could all be marked down as campaign bluster and the hiccups that come with any transition into office. Other more seasoned politicians and diplomats have challenged Europe to do more for NATO and many have expressed exasperation with the transatlantic partnership. Former Defense Secretary Robert Gates and Assistant Secretary of State for European Affairs Victoria Nuland are two obvious examples, but the list is a long one. Nevertheless, the positions taken by Trump with respect to Europe both as candidate and as President are unusual enough to warrant putting them into context.
International regimes for the management of inter- and intra-state conflict only work when they can operate in a stable regional security environment. International mediators can have the most skillful negotiators, the most credible ‘honest-brokers’, the most attractive incentives for peaceful reconciliation, and the most sophisticated political institutions for power sharing, but they are unlikely to succeed without the determined support of Great Powers and so long as there are other powerful actors in the region who encourage one side or the other to resort to violence. Moreover, this is an enduring feature of international relations; it was as true during the interwar period as it is now that the Cold War has ended. Security is a nested condition that policymakers and diplomats create from the outside-in and not from the inside-out.
If there was a moment when it was possible to speculate that the British election would send a clear signal about Britain’s relationship with Europe, it was short-lived. The British people may well deliver a decisive majority to Theresa May and, in the best-case scenario for her next government, she may be able to leverage that majority to win a good deal for Britain and to lay the foundations for Britain’s new role in Europe and at the global level. Even if that all came to pass, however, future historians would be hard-pressed to say those outcomes were a clear message from the British people. Britain’s relationship with Europe is at best peripheral to a contest that is much more about leadership style, domestic policy, and the complex web of security that surrounds terrorist violence. Leaving aside the peculiarities of the British electoral system, you could easily imagine this contest playing out in any one of a dozen different countries on the Continent. Britain is not having an election about Europe; it is having a very European election.
Something happened to Europe after the fall of the Berlin Wall and it affected both sides of the continent. That ‘something’ was not simply a diffusion of western ideas, policies and politics to the East. The former communist countries of Central and Eastern Europe underwent a profound transformation, but to say that they became ‘normal’ – and by saying that to mean they became more ‘western’ – would be an exaggeration. Such a statement would also overlook the impact of ideas, policies, politics, and people that spread from East to West. The history of Europe since 1989 is a story of ‘co-transformation’. It is also more contingent than teleological. Things did not have to wind up as they have – which is good, because there are many things about Europe that we should work hard to change.
As we approach another round of talks on the third Greek bailout package, I thought it would be appropriate to share two thoughts on the importance of debt forgiveness and on Europe’s preparedness in case this all goes wrong. My basic line is that debt-forgiveness is the only pragmatic choice. I also worry that Europe is not as prepared for the alternative as it should be.
Oxford University Press has published two new books on the political economy of the euro area that should be required reading. One, by C. Randall Henning, explains why the International Monetary Fund has become a central actor in the stabilization of the euro area; another, by Waltraud Schelkle, sheds new light on what the single currency has to offer both in its current form and looking to the future. My reviews of both books are below.