Image credit: Poster Collection, GE 2678, Hoover Institution Archives.

Recent elections in France, the Netherlands, and Austria, in which Eurosceptic populist and patriotic parties did poorly in national elections, suggest to some that the EU is still strong despite Britain’s vote to leave the union. Yet the problems bedeviling the EU ever since its beginnings in 1992 have not been solved. Nor are they likely to be with just some institutional tweaks and adjustments. “More Europe,” that is, greater centralization of power in Brussels at the expense of the national sovereignty of member states, is not the answer. The flaws in the whole EU project flow from its questionable foundational assumptions.

Those problems have been identified and analyzed for decades. EU economic growth and per capita GDP consistently lag behind those of the U.S., in part because of over-regulated dirigiste economies, over-generous social welfare transfers, expensive retirement benefits, restrictive employment laws, and higher taxes. Some countries have addressed these problems, most importantly Germany. But Germany’s economic success has exacerbated the stark contrast with the poorer performing Mediterranean countries. They are still struggling with debt and deficits, and suffering double-digit unemployment rates, particularly among the young, which range from 15 to 25 percent. Germany’s current dominance makes the EU look less like a union of sovereign states and more like a German economic empire.

Particularly ominous is the case of France, the second largest economy in the EU. France is facing cumulative national debt––government, household, and business––that totals 250 percent of its GDP, up 66 percent since 2007. This total does not include unfunded pension and health-care obligations. New president Emmanuel Macron has pledged neoliberal reforms to begin correcting this unsustainable drag on growth, yet previous attempts at even minor changes by French presidents have been met with street demonstrations comprising millions of protestors. It remains questionable whether there is the will among the citizens and their political leaders to face the harsh cuts and painful adjustments necessary to right France’s fiscal ship. Given the size of France’s economy, a fiscal crisis similar to that still troubling Greece will severely stress and further fracture the EU.

To continue reading: http://www.hoover.org/research/europe-still-ailing

Image credit: Poster Collection, INT 294, Hoover Institution Archives.

In the immediate wake of the Brexit vote, a normally astute talk-show host declared, gleefully, that “the European Union is dead.”

One begged, and begs still, to differ. The EU is a bureaucratic monster that interferes absurdly with “the structures of everyday life.” Its grand rhetoric masks expensive inefficiencies and military powerlessness: In global affairs, it’s a chatroom. On the economic side, its attempt to establish a common currency, the Euro, was folly, unleashing some economies but debilitating others. It’s unable, without NATO, to defend its borders, and its non-response to mass immigration has been cowardly, immoral, and self-destructive.

And for all that, the EU remains a miracle to cherish, an experiment that has changed world history for the better. It’s the guarantor of peace among yesteryear’s masters of destruction, and it has provided far-better lives for hundreds of millions within its boundaries. The EU’s failures make headlines, while its breathtaking long-term triumph goes unappreciated.

While gains in Europe’s prosperity have been remarkable (if cyclical), the greatest contribution of the EU has been to make war all but impossible between constituent populations who slaughtered each other for centuries over minor border adjustments, dynastic spats, ethnic delusions, greed and, of course, God. Nations that within the lifetimes of men and women still living among us enthusiastically engaged in the greatest wartime butchery in history now squabble, disarmed, about farm subsidies, fishing rights, and bail-outs. Countless minor resentments remain, but as the recent landslide win of a pro-EU French presidential candidate underscored, even malcontents vote to keep the EU payments coming.

To continue reading: http://www.hoover.org/research/state-european-union-god-bless-bureaucrats

Image credit: Poster Collection, INT 280, Hoover Institution Archives.

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.

Most scholars who look at the transatlantic relationship from the U.S. perspective start with two commitments:

• The transatlantic partnership benefits the United States; and,
• A united Europe offers greater advantages for the United States than a divided or fractious Europe does.

The arguments to support the benefits of transatlantic partnership touch on economics, diplomacy, and security.

• The European Economic Area is the world’s largest marketplace; U.S. multinationals have a huge and very profitable presence in that market; and European multinationals invest heavily in the United States (and so create significant U.S. employment).
• In diplomatic terms, European societies are at roughly the same level of development as the United States; Europeans and Americans hold similar values and priorities; and European diplomats are available to support a wide range of U.S. initiatives or even to take the lead where a high-profile U.S. diplomatic presence would be counter-productive.
• Finally, European countries have significant potential to contribute to joint interventions and peace-keeping operations; they have infrastructure and airspace close to areas where the U.S. has vital security interests; and they are actively involved in areas of the world where the U.S. would not want to play the leading role in security provision and where it would be against U.S. interests for the security environment to deteriorate.

To read more: http://www.hoover.org/research/us-foreign-policy-and-transatlantic-relationship