Is Europe Over?

Europe has always been a rather tenuous concept. A rump continent, Europe represented the barbarous hinterlands for the Greeks and Romans. The first use of the term “European” occurred in a chronicle describing the forces of Charles the Hammer that turned back the northward advance of Islam at the battle of Tours in 732. Long celebrated in Europe as a victory of civilization over barbarism, the Battle of Tours was, as historian David Levering Lewis reminds us in God's Crucible, actually the opposite: “the victory of Charles the Hammer must be seen as greatly contributing to the creation of an economically retarded, balkanized, fratricidal Europe that, in defining itself in opposition to Islam made virtues out of religious persecution, cultural particularism, and hereditary aristocracy.”

For most of its existence, Europe has been just that: a continent divided against itself. From the conquests of Charlemagne to the unprecedented bloodletting of two world wars in the 20th century, Europe saw only brief stretches of unity, and that only by virtue of imperial force.

Europe as a unified, democratic, relatively peaceful, and economically prosperous order has so far only enjoyed a brief lifespan. This conception of Europe dates to the early days of the Cold War and the perceived need to create a bulwark against the Soviet Union to the east. Centuries of Franco-German enmity vanished after World War II, as these two key European countries united against a common enemy at the urging of a common friend (the United States). The resulting economic alliance would expand and deepen over the decades into the current European Union of 27 countries. The EU now boasts a parliament, a council of ministers, a common currency (for 17 of the 27), the largest economy in the world, and even, somewhat ominously, a military force that has intervened overseas a dozen times or so.

Thanks to a difficult-to-contain economic meltdown, however, this ambitious regional project suddenly seems on the verge of unraveling. And the very qualities that began to gather around the concept of “European” in the 8th century – religious persecution, cultural particularism, and hereditary aristocracy – appear to be returning in the form of Islamophobia, extreme nationalism, and the oligarchy of bankers. It's not a pretty sight.

Two governments – the nominally socialist Papandreou administration in Greece and the substantively insane Berlusconi burlesque show in Italy – have already fallen. The euro is at risk of collapse, and some European politicians are waxing apocalyptic. “If the euro zone were to fall apart then it's hard to exclude the possibility of EU falling apart as well,” argues Polish Finance Minister Jacek Rostowski, who holds out the possibility of the return of authoritarian governments and even war.

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It's not just Europe's problem. “We are all directly affected by the crisis in Europe,” says Treasury Secretary Timothy Geithner, and for once I agree with him. Columnist Robert Samuelson darkly predicts “a slow side into currency wars and protectionism,” while the IMF's Christine Lagarde warns of an impending “lost decade” for the world economy.

The proximate cause of the current European crisis is debt. Much of the continent has racked up big piles of the stuff: more than their GDPs, in fact, in the case of Greece and Italy (with Ireland, Belgium, France, and Portugal not far behind). Ordinarily, a country can rejigger its currency, in effect devaluing it, to make exports cheaper and grow the economy. But these countries no longer have their own currency. They have the euro, and, according to agreements all 17 Eurozone countries signed, their national debt cannot exceed 60 percent of their GDP. This rule has not been precisely applied, but if the rate of borrowing rises so high that the governments no longer have any hope of paying back the debt, they have little choice except to appeal to the European authorities and the IMF for a bailout package. Greece, Portugal, and Ireland all qualified for rescue. The bailout money, however, was all tied up with strings. Structural adjustment – once the remedy reserved for the Third World periphery – has now been applied to the periphery of Europe itself.

The debt crisis, according to conventional analysis, results from profligate governments that have maintained high levels of social services without the income necessary to support them. But Europe's current economic crisis is in many ways an aftershock from the financial crisis of 2008, when European banks invested, unwisely, in all the fancy instruments that U.S. institutions created to peddle risky mortgages. Flush with their own bailouts, which even included some U.S. bailout money, the same European banks then shifted into investments in sovereign debt. In other words, the banks were like pushers who, locked out of one drug market, simply turned to another. They made a killing at first, raking in over a billion dollars in fees alone, and they did little to ensure responsible policy by the governments concerned (fiscal responsibility, after all, would have interfered with short-term profit margins).

Marking down the debt means that banks will take a loss. So, for instance, if Italian bonds are written off at 50 cents to the dollar, Goldman Sachs would lose 10 percent of its $3.43 billion in profit for the first nine months of the year, according to The New York Times. If anyone in this sad circus should be shouldering the austerity, it should be the banks. But it looks likely that the 99 percent will continue to pay the penalty for the folly of the 1 percent.

The threat of government default and the prospect of economic austerity are bad enough. The political fallout might be even worse. Europe has been overwhelmed by a rising tide of extreme nationalism. Far right-wing parties have been gaining strength throughout the continent, particularly in places that have been largely immune to such extremism in the last 50 years. The Progress Party in Norway, to which mass murderer Anders Breivik was once affiliated, is now the second-largest party there; Geert Wilders, the flamboyant Islamophobe of the Netherlands, has led his party into third place; the Democratic Party in Sweden, which similarly focuses its wrath on immigrants, made it into parliament for the first time in the 2010 elections.

These extremist successes in the putative territories of tolerance augment the rising support for far-right wing parties elsewhere in Europe – Jobbik in Hungary, the Northern League in Italy, the Freedom Party in Austria. Ultra-nationalists have also been effective at organizing on a local level. The far-right-wing Plataforma per Catalunya is making headway in municipalities across the Catalan region of Spain. In Athens, a neo-Nazi recently won a spot on the city council. And these are the polite ones. Right-wing vigilantes have rampaged on the streets of Sofia, Gyöngyöspata, Dudley, Warsaw, and other places.

From a thug's eye view, Europe today looks a lot like Europe of the 1930s: steeped in economic crisis and cursed with dithering politicians, with Islamophobia and anti-Roma sentiment substituting for anti-Semitism. Then as now, the far right has employed a dangerous populism to take advantage of the economic downturn. It has identified two primary culprits – immigrants (who compete for jobs and government benefits) and European institutions (which mismanaged the economic situation). These explanations are increasingly persuasive in an environment in which the center left, as in Greece or Spain, has been hamstrung by its own involvement in creating the economic messes and imposing the harsh remedies.

Of course, as sometimes happens as a result of crisis, Europe might be jolted into taking the next step toward even greater political and economic integration. In response to the economic crisis and the rise of nationalism, German Chancellor Angela Merkel has proposed such a double- down strategy. “The task of our generation now is to complete the economic and currency union in Europe and, step by step, create a political union,” Merkel recently said. “It’s time for a breakthrough to a new Europe.”

“What she means is that either we get more Europe now or the project will die,” one of her Christian Democratic colleagues explained. “This means that Germany must give up some sovereign rights and some party colleagues and voters may find this hard to swallow. But there’s no alternative.”

In some ways, the Merkel approach is bold and brave, for it aims to steady the jittery markets and puts Germany's own relative stability at risk. But Merkel faces an uphill battle. The cry of Europe that mobilized the armies of Charles the Hammer and proved so effective during the Cold War no longer stirs the blood. And it's not just the ultranationalists who are uncomfortable with the notion of “more Europe.” The left, which threw in its lot with European integration, has become disillusioned. The social ideals that once animated the European project are dissipating fast. The continent has simply become a good place to do business, particularly in financial services. The current crisis and the resulting austerity measures have served to further Americanize Europe through privatization, reduction of government services, and the like.

Europe as a continent will, of course, continue. But what made Europe a compelling political, economic, and social alternative wedged between Anglo-American free marketeers and Soviet nomenklatura is rapidly becoming a thing of the past. A much less appetizing European history, whether the dangerous interwar period of the 1930s or the fratricidal melee of the 8th century, now threatens to repeat itself.

Iran and War Talk

Just when President Obama was hoping to pivot U.S. policy toward the Pacific, he has to spend much of the time at the APEC summit in Hawaii talking about the same region of the world that has dominated Washington's attention for the last decade. A new International Atomic Energy Agency report suggests that Iran's nuclear program has advanced considerably. The United States has imposed more sanctions against the country. And Israel continues to float rumors of preparations to bomb Iran's nuclear sites.

“Congress is not really interested in discussing the matter with Iran,” writes Foreign Policy In Focus contributor Paul Mutter about U.S. sanctions in This Is Not What Containment Looks Like. “One of the measures bans virtually all contact between U.S. and Iranian officials unless the president can certify to Congress – at least 15 days in advance – that not meeting 'would pose an unusual and extraordinary threat to the vital national security interests of the United States.' The bill targets not only Iran’s nuclear weapons program, but justifies sanctions for 'other purposes' as well – amounting to what William O. Beeman calls an agenda of 'making certain that the United States and Iran never achieve formal relations.'”

It's not too late to reverse course. “In light of major upheavals across the Middle East and the shaky foundations of the global economy, Washington should realize that the last thing it needs is to be dragged into a new and even more destructive war,” writes FPIF contributor Richard Heydarian in Time to Rekindle Talks with Iran. “More importantly, pushing for further sanctions would only embolden Iran to reconsider its very membership in the Nuclear Non-Proliferation Treaty (NPT), given Tehran’s increasing frustrations with the IAEA. The best solution is to channel this renewed sense of urgency into the diplomatic track by reviving talks and exploring the so-called 'step-by-step' option proposed by Russia.”

Our Focal Points blog has been covering the Iran debate in real time. Check it out for contributions by Russ Wellen, Ibrahim Kazerooni and Rob Prince, Noah Gimbel, Stephen Zunes, Peter Certo, and Jack Murphy.

Democracy's Double Standards

Washington has never put democracy at the top of the list of criteria to determine relations with other countries. Uzbekistan is a prime example. It's been led by a monomaniacal dictator, Islam Karimov, for more than two decades. His conduct hasn't recently improved. And yet, the Obama administration wants to resume military aid to the country.

“Torture is endemic in Karimov’s Uzbekistan, where his regime has banned all opposition political parties, severely restricted freedom of expression, forced international human rights and NGOs out of the country, suppressed religious freedom, and annually taken as many as two million children out of school to engage in forced labor for the cotton harvest,” writes FPIF columnist Stephen Zunes in Obama to Aid Uzbek Dictatorship. “Thousands of dissidents have been jailed and many hundreds have been killed, some of them literally boiled alive.”

Meanwhile, Washington continues to ignore what's going on in Bahrain. “Recently, a quasi-military court in the small Gulf state sentenced 20 doctors and nurses to up to 15 years in jail,” writes FPIF senior analyst Adil Shamoo in Bahrain's Courageous Doctors, an article that has generated considerable debate on our site. “The charge against them? Treating injured demonstrators opposing the regime.”

The United States has been supporting Kenya's war in Somalia but not doing much to support Kenya's fragile democracy. “Given that up to 40 percent of the 2007 post-election violence was perpetrated by Kenya’s police forces, U.S. aid should also focus on improving Kenyan security to protect – rather than harm – its civilians,” writes FPIF contributor Cassidy Regan in Supporting Peace – Not War – in Kenya. “Programs to disarm local militias and reduce arms trafficking in the greater region, including the destruction of small arms and light weapons when possible, should be increased.”

Washington should consider a similar approach to Libya but avoid a heavy hand. “Because the Western powers’ humanitarian claims for intervention have elicited suspicions of mixed motives relating to strategic and economic interests, it is all the more important for outside forces to tread carefully and ensure that Libyans take control of their own future,” writes FPIF contributor Saeb El Kasm in Rebuilding Libya. “The Libyan people are entitled to freely exercise their right to develop their own self-sustaining political institutions without too much outside assistance. Surely, Libya will require technical expertise to rebuild its governance architecture. However, such assistance should only come by formal invitation.”

Militarizing Asia

President Obama is touring the Pacific this week, stopping off in Hawaii, Indonesia, and Australia. This last stop in particular is telling, for the United States is about to build a new U.S. Marine base outside of Darwin. It's all part of shifting U.S. military presence away from contentious spots in Northeast Asia.

It's also part of U.S. military strategy to rely more on our allies in the region to take on the burden of securing stability (i.e.: containing China and North Korea). South Korea, for instance, is trying to overcome the objections of local residents and build a naval base of its own on Jeju Island off its southern coast. “The South Korean government plans to open the naval base in 2014 to host submarines, warships, and the three new Aegis-equipped destroyers that cost South Korea one billion dollars each,” I write in a piece for Inter Press Service called The Militarization of Paradise. “The government argues that the base will protect sea lanes for Korean commerce and bring economic benefits to the island. But Korean activists see different motives for the Jeju naval base. Under the terms of their mutual security alliance, the United States can use any South Korean military facility, and that would eventually include the Jeju base.”

Of course, the United States might try a different tack and actually try to resolve regional problems diplomatically, for instance with North Korea. “To break the deadlock of negotiating with the North, the United States must take the lead in more actively engaging with North Korea in order to effectively guarantee the stability of Northeast Asia and prevent any transfer of nuclear weapons, technology, or materials to state or non-state actors,” writes FPIF contributor Shiran Shen in Should We Engage North Korea? “Waiting for North Korea to collapse is no substitute for an actual policy. North Korea is long-lived and is more robust than most people think. Despite the country’s defunct economy, extremely limited contact with the outside world, poverty, and famine, the regime endures.”