EU at the Crossroads: Integration or Disintegration (1)

While the European Union is theoretically the world’s biggest economy using the world’s second most popular currency in international transactions, it remains to be seen whether in the future it will evolve into a genuine component of a multi-polar international system or become a satellite in someone else’s – most likely US – orbit.

There still remain many obstacles toward achieving a certain “critical mass” of power and unity. While individual EU member states, most notably Germany and France, are capable of independent action in the international system, individually they are too weak to influence the actions of the United States or China or even Russia. In the past, individual European powers relied on overseas colonial empires to achieve great power status. In the XXI century, European greatness can only be achieved through eliminating not just economic but also political barriers on the continent. At present, European leaders are presented with both incentives and obstacles to such integration, though one may readily discern a number of potential future paths toward future integration.

United Europe or Fourth Reich?

The greatest obstacle toward further European integration is the dominant position of Germany within the Union, and it remains to be seen whether a unified German state is compatible with a united Europe. The most recent two attempts to establish a pan-European empire were done by the dominant European actors at the time, namely France in the early XIX century and Germany in the early XX, and failed because the imposition of rules beneficial to the hegemon provoked resistance – though going to war with Russia in both cases proved to be the fatal mistake.

Today, Germany once again dominates the continent, though it does so using a velvet glove of the Eurozone and the European Central Bank rather than the iron fist of the Wehrmacht. While the German media are full of self-serving praise of their country’s economic prowess, it is unlikely in the extreme German economy would be enjoying export successes had its key trading partners, namely other European countries, not been prevented from engaging in self-defensive economic measures such as devaluations by the existence of the single currency. Consequently there is a strong anti-German sentiment within the EU which provides much of the fuel to the Euroskeptics. After all, many of the unpopular EU policies, starting with fiscal austerity, are backed by Germany whose economy benefits from a strong, low-inflation Euro.

Moreover, the current crop of German leaders, starting with Angela Merkel herself, view themselves as Germans first and Europeans second. Angela Merkel is an “alumna” of the German Democratic Republic where she never experienced European integration, and where revanchist nationalist sentiments re-emerged after reunification. Her political success had a lot to do with her desire to quietly promote “Germany First” policies under the guise of European integration. But what is good for a German is lethal to an European. If European integration is to have a future, it will have to start with an attitude change in Berlin. Fortunately, there are a number of factors encouraging Germany’s leaders to do so.

The US Factor

Aside from the contradictions inherent in the EU’s economic and political structures, the greatest threat to the European Union emanates from the least anticipated direction: the United States of America. At no point did European leaders, with possible exception of Charles de Gaulle, consider the European project as a challenge to the US power. Rather, they viewed United States as a benevolent hegemon without whose good offices European integration or, for that matter, postwar reconstruction, would not be possible. They also never considered the possibility the United States might change its own attitude toward Europe, which it viewed as a comfortable political backwater permanently in America’s shadow, a quaint theme park of cheeses, chocolates, wines, and luxury automobiles, but not a challenger or even a rival to the US.

When the era of post-Cold War globalization began, United States still behaved in a benign and condescending manner toward potential rivals. It was still the Ronald Reagan’s self-confident “Morning in America” superpower. The 1970s stagflation and Jimmy Carter’s sense of “malaise” were a distant memory, it has just seen off the USSR as a political and military rival and Japan as an economic one, so what could possibly go wrong? Who could ever question America’s military, economic, and scientific supremacy? Russia was in the throes of severe crisis which was sure, according to most US pundits’ predictions, to render it a US satellite, China was only beginning its economic transformation, and the EU was still in America’s shadow.

It may have remained this way indefinitely had America’s political economy remained inherently viable and sustainable. Four decades of neoliberal reforms, alas, greatly sapped the strength of America’s middle class whose buying power was the backbone of the US economy as well as that of many economies around the world.

But as US consumers’ purchasing power has waned, successive US administrations try to preserve the illusion of prosperity by expanding consumer credit and promoting policies leading to massive asset “bubbles” of a magnitude not seen since 1929 in the hopes of creating a “wealth effect” to keep Americans spending. After two financial crashes and faced with the prospect of a third, inflated during the Obama Administration, the Trump Administration decided Americans’ prosperity would be preserved by destroying economic competitors.

Russia, a major exporter of natural gas and oil, was the first to be targeted in order to reduce its share of the global market by the Obama Administration. Economic warfare against China followed a few years later, and the next targets on the list are America’s “allies” running major trade surpluses with the United States such as Japan, the Republic of Korea, and the countries of the EU.

The Mental Barrier

Europe has to decide for itself whether it is mentally prepared for a confrontation with the United States. So far there are nearly no indications it has the ability. Irrespective of US tariffs (de-facto sanctions) on European steel and aluminum, the ban on dealings with Iran following the peremptory US withdrawal from the JCPOA to which the EU was a party, the looming sanctions against North Stream 2, the demands to spend more on US weapons and desist from developing an independent European security and foreign policy identity, the pressure to ban Huawei, and the likely tariffs on car imports from Europe, EU officials are still treating it as a big misunderstanding.

Or, at most, as a product of Trump’s generally erratic personality, forgetting these policies are being both initiated and implemented by an army of bureaucrats left over from the Obama Administration. Few things testify to the level of self-delusion than Angela Merkel, whose personal cell phone was listened to by the NSA and whose North Stream 2 pipeline to Russia is facing the threat of US sanctions against German entities engaged in its construction and maintenance, and Turkey, which is facing similar US pressure, drop its plans to procure the S-400 air defense system from Russia.

On the other hand, the increasingly harsh US treatment of its allies is helping Europe overcome that mental barrier. Even Merkel was forced to conclude that the United States could no longer be trusted and that Europe would have to forge its own path.

Much depends on what the post-Trump US foreign and trade policies will look like, but there are few indicators Washington is willing to end to the new cold war against China and Russia. After all, the original Cold War created the huge US national security bureaucracy and defense industry which form an irresistible pro-conflict lobby. But if the US persists on that path, the heavy-handed treatment of the EU will persist as well, since the US will need to bend Europe to its will in order to improve its chances in the conflict against the great powers of the East.

Eurasia Calling

While the attraction of Atlanticist orientation is fading, the attraction of a Eurasian one is increasing thanks to the growth of China and Russia and their more restrained foreign policies. Most European countries, particularly Germany and even France, have resisted US pressure to blacklist China’s Huawei. While Emmanuel Macron dismissed US national security threat claims by labeling Huawei a commercial entity that can be regulated using normal industrial standards, his statements should be taken in context of European experts sounding alarm at the “digital colonization” of Europe by US high tech firms. That vulnerability can be offset by cultivating alternatives in the event the US-EU conflict escalates.

By the same token, Germany has been steadfast in its insistence on the construction of North Stream 2 and has managed to obtain France’s support for the venture. Europe’s independence of the United States is taking the form of expanding ties with countries the US views as adversaries. Moreover, it does not hurt that both Russia and China prefer to see the EU as an independent actor, capable of developing its own foreign policy and defending own interests. While the United States has been promoting the idea of the “Russian threat”, in practice very few politicians in Western Europe seem to believe such a threat exists, and the absence of that threat also facilitates Europe’s distancing itself from the US.

Read the second part of the article

yogaesoteric
September 6, 2019

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