June 11, 2003 | Testimony on Europe
House CommitteeonInternational Relations, Subcommittee on Europe:June 11th, 2003
Prepared Statement of John C. Hulsman, Ph.D., Research Fellow for European Affairs, the Davis Institute for International Studies, The Heritage Foundation.
As the fabulously successful twelve-step program pioneered by Alcoholics Anonymous has conclusively demonstrated, one cannot tackle a crisis until acknowledging the reality of a genuine problem. Throughout the 1990s, mutual exchanges of pleasantries and vague rhetoric of a 'Europe whole and free' obscured the fact that the transatlantic relationship was increasingly in crisis, with a significant portion of the European political elite viewing the United States as part of the problem in international politics, rather than as part of the solution to global problems. Representative of this trend is the typical anodyne statement that, "a stronger Europe is also more likely to be a reliable strategic partner with the U.S." Given the resurgence of a European-wide strain of Gaullism, this platitude is increasingly open to question.
In the past several years, genuine policy differences between the U.S. and its European allies have emerged over: trade issues such as the 'banana war'; genetically modified foods; the American Federal Sales Corporation (FSC) tax; Europe's refusal to substantially reform the Common Agricultural Policy (CAP) and the repercussions this holds for the Doha global free trade round; the moral justness of the death penalty; whether Cuba, Libya, and Iran should be engaged or isolated; Iraq; the Israeli/Palestinian crisis; the role international institutions should play in the global arena; when states ought to be allowed to use military force; ideological divisions between American realists, neoconservatives and European Wilsonians; the Kyoto Accord; the jurisdiction of the International Criminal Court (ICC); America's increase in steel tariffs; National Missile Defense (NMD) and the US abrogation of the ABM treaty; the military debate within NATO regarding burden-sharing and power-sharing; American unilateralism; Turkey's ultimate role in the West; widely varying global threat assessments; the doctrine of humanitarian intervention and the efficacy of nation-building; and, how to organize an economy for the best societal effect, to name a few. This incomplete list should make it crystal clear to the most complacent of analysts that drift in the transatlantic relationship is about far more than carping, black leather-clad, ineffectual Europeans glowering about American dominance from the safety of a Parisian café. It is a bitter truth that in the run-up to the Iraq war, consistent polling in Europe shows a majority of the public more worried about unfettered American power than about Saddam Hussein. Instead, the drift is at least partly centered on fundamental philosophical and structural differences held by people with a very different view of how the world should be ordered from that of the average American; it should be evaluated far more seriously than has been the case in Washington.
Those Europeans pushing for the creation of a more centralized, federal, coherent European Union (EU) political construct do so by increasingly defining themselves through their differences with Americans. European Gaullists see the emergence of a European pole of power as an effective foil to overwhelming American global power. The French position, predictably the most suspicious of America, could not have been clearer during the Jospin premiership. A more united Europe was necessary to 'build counterweights' to combat 'the risk of hegemony.' Any thought that classical balance of power thinking was no longer a relevant tool for today's global environment, ought to be put to rest by any vague scrutiny of the French government's rationale for a more coherent Europe. Across the continent, Gaullism was clearly on the rise at the end of the 1990's.
The reasons for this resurgence are structural, and are likely to endure. With the end of the Cold War, it was to be expected that America and Europe would drift. Without the unifying growl of the Soviet bear to subsume the reality that America and various European states had quite distinct international interests, there were bound to be divergences. The U.S. has emerged as the sole superpower in the post-Cold War era, while European states, with the partial exception of France and the UK, are at best regional powers. This structural difference, unlikely to change in even the medium- to long-term, does much to explain the practical policy differences increasingly emerging on both sides of the Atlantic.
Not only has America gone from strength to strength in the new era, Europe has conspicuously failed to emerge as a coherent power in its own right. This sense of a resurgent and increasingly unfettered America, coupled with an introverted, increasingly marginalized Europe, does much to explain not only the differences in policy between the two poles, but also the increased virulence many Europeans feel toward American policies. In the end, such differences are less about philosophy and more about power; it is not that European Gaullists feel American international policies are merely wrong - increasingly they feel they have no power to affect them, even at the margins. This change in political psychology does much to explain both the rise of an anti-American Gaullism in Europe, as well as the increasing drift in the transatlantic relationship.
The example of European military weakness is instructive. Given anemic European defense spending, it is little wonder that many politicians in Europe are implacably opposed to the military tool being used in international relations, that they don't want strength to matter in the international community, that they want to live in a world where international law and institutions predominate, that they want to forbid unilateral military action by powerful nations, and that they advocate all nations having equal rights that are protected by accepted international norms of behavior - the Europeans are merely making a philosophical virtue of a very practical necessity.
While attempting to limit through diplomacy what is a glaring weakness in their own power portfolio, European Gaullists are attempting one thing more - to balance the United States in a non-traditional manner, by harnessing overwhelming American power in multilateral institutions in such a way as to have a significant say in how such power is used. This reality explains France's implacable demand that all action against Saddam Hussein proceeded institutionally through the Security Council, where Paris has a veto. It is an effort by the Lilliputians to tie Gulliver up, and it is completely understandable, given the present power discrepancy between Europe and the U.S. It also structurally explains why relations are increasingly frayed between an American Gulliver that naturally wants to preserve its freedom of action as much as possible and European Lilliputians that, given their strategic weakness, want to constrain the American behemoth in multilateral institutions as much as possible. The rise of European Gaullism, the desire to create a countervailing pole defined by its very un-American nature, is a logical structural response to such a world. The possible rise of a coherent Paris-Berlin-Moscow alliance designed to permanently challenge American power in the wake of the Iraq crisis should be seen as a fledgling effort to tie the Gaullist impulse into a more unified political formation.
Just as all is not well in the transatlantic relationship, rhetoric should not replace reality as to Europe's capabilities to emerge as a major power, even in the medium- to long-term. While the desire to successfully compete with America may be ensconced in many European chanceries, the ability to do so appears to be well beyond Europe's means. Militarily, despite a collective market that is slightly larger than that of the United States, Europe presently spends only two-thirds of what the U.S. does on defense (with American defense increases, even this paltry amount is due to relatively decrease) and produces less than one quarter of America's deployable fighting strength. German defense spending has dropped to a laughable 1.5 percent. Likewise, besides the UK and France, all other European countries are presently incapable of mounting an expeditionary force of any size anywhere in the world without resorting to borrowing American lift capabilities. Current U.S. defense increases are greater than the entire defense budgets of any of the individual European allies. As Richard Perle bluntly put it, Europe's armed forces have already "atrophied to the point of virtual irrelevance."
Given the moribund state of the European economies and the proclivity of the European publics to eschew significant defense spending, there is absolutely no empirical evidence to suggest that this trend of relative military decline will change in the long-term. At best, the United States can expect a multi-tiered NATO, where, beyond the British and the French, individual European member states will, optimally, fill niche roles in the overall American strategic conception. American decision-makers used to positive spins on the Alliance must acknowledge that not all the allies are equal - that real differences exist between European capitals over how often to militarily side with the US, and how much capability individual countries can bring to bear.
Economically, the latter part of the 1990s has not led Europe into the promised land, so confidently predicted by many. Rather, massive and largely ignored, structural problems - labor rigidities, a demographic/pensions time-bomb, a safety net that precludes significant cuts in unemployment, too large a state role in the economy stifling growth - have led Europe into a cul-de-sac. Staggeringly, according to the OECD, since 1970, the euro-zone area has not created any net private sector jobs.
Germany is emblematic of this Western European problem. Its economy grew at a rate of only 0.2 percent in 2002. Germany's public deficit overshot EU Stability Pact strictures at a rate of 3.7 percent this year and probably will next year as well. Efforts to lower unemployment remain stalled, with over 4.5 million Germans remaining out of work. This economic snapshot is also representative of Germany's longer-term economic performance. After an initial, post-reunification surge, over the past ten years, German GDP increased by a mere 1.5 percent a year on average. The reasons for this are as simple as they are politically intractable - Germany's non-wage labor costs are among the highest in the world, well over 42 percent of gross wages. This factor, combined with excessive labor rigidities, a virtually unfunded pensions system, and a looming demographic crisis means that the motor of Europe will continue to sputter. Whether Chancellor Schroeder's most recent effort to begin the reform process amounts to anything is certainly open to question. Structural economic problems common to Italy, France, and Germany, as well as the accompanying lack of political will to deal with them, signify that the only question facing Europe is whether it continues to limp along or falls into a Japan-style torpor.
In some ways, the euro has made this difficult economic situation even worse. Its one-size-fits-all macroeconomic policy has led interest rates to be set far too high for a sputtering German economy, while threatening a booming Ireland with the danger of inflation in the long-term. The euro zone is far from an optimal currency area. It remains to be seen whether the economies of Europe are sufficiently in-sync to make the project flourish in the medium-term.
The Stability Pact is emblematic of Europe's overly rigid macroeconomic approach. Ironically enacted to quell German fears about the long-term economic soundness of countries such as Greece, Italy, and Portugal, it is Berlin itself (as well as Lisbon) that has been most hamstrung by the new strictures - limiting budget deficits to 3 percent per year. Already in recession and faced with a certain warning from the EU and the possibility of massive fines amounting to 0.5 percent of the GDP if it fails to correct its budget imbalance, Germany has been forced to enact austerity measures at a time of economic decline - the worst short-term fiscal policy imaginable. Such a rigid economic approach seems politically doomed in the long-term; already, critics ranging from EU Commission President Prodi to the French and German governments are signaling the need to fundamentally reform the process. In the short run, the Stability Pact has proved to be just another unnecessary constraint on a German economy already caught in the doldrums. There is little sign that either Germany, or Europe as a whole, is likely to gain economically relative to the U.S. in the medium- to long-term. Rather, the challenge is to avoid the permanent economic stagnation of the continent.
As with military matters, the overall view must be qualified. Over the past five to eight years, the British, Spanish, Dutch, and Irish economies have been growing at very respectable rates. Given their more open pensions systems, neither Dublin nor London face the same demographic crisis currently looming in Italy, France, or Germany. Great Britain remains the largest direct investor in the United States, as America does in the UK. Moving geographically around the traditional motor of EU integration - France, Germany and Italy - economic liberalism is found flourishing on the European periphery. It is hard to characterize a common European economic state of being, as the differences outweigh the economic commonalities.
This is even truer in the political realm. Contrary to any number of misleading commission communiqués, the Europeans are light years away from developing a Common Foreign and Security Policy (CFSP). One has only to look at the seminal issue of war and peace during the past year- what to do about Saddam Hussein's Iraq - to see a complete lack of coordination at the European level. Initially, the UK stood shoulder-to-shoulder with the U.S., Germany's militant pacifists were against any type of military involvement, be it sanctioned by the UN or not; with France holding a wary middle position, stressing that any military force must emanate from UN Security Council deliberations. It is hard to imagine starker and more disparate foreign policy positions being staked out by the three major powers of Europe.
Even on issues relating to trade, there are vast differences within the EU. The recent spat between President Chirac of France and British Prime Minister Blair was about far more than atmospherics. It was about whether northern European countries, such as the UK, would continue to countenance southern EU countries' (such as France) dogged desire to protect the wasteful Common Agricultural Policy (CAP), even though it may well prove to be a deal-breaker at the Doha global free trade round. On missile defense, relations with Turkey, and critically, the future course of the EU - with Germany for deepening and widening, the UK for widening primarily, and the French stressing deepening of EU institutions - one finds a cacophony of European voices, rather than everyone singing from the same hymnal.
Military weakness, economic stagnation and political disunity - this is the reality that confronts American decision-makers today when looking at Europe. Despite overly cheerful rhetoric and the hopes of many on the continent, Europe is not likely to challenge American primacy in the long-run. This is not due to any general, continental love of Washington or its policies. Rather, it is the result of European political, military and economic weakness.
In separating rhetoric from reality there is a comforting final conclusion that needs to be drawn by American policy-makers - the very lack of European unity that hamstrings European Gaullist efforts to challenge the United States, presents America with a unique opportunity. If Europe is more about diversity than uniformity, if the concept of a unified 'Europe' has yet to really exist, then a general American transatlantic foreign policy based on cherry-picking - engaging coalitions of willing European allies on a case-by-case basis - becomes entirely possible. Such a stance is palpably in America's interests, as it provides a method of managing transatlantic drift while remaining engaged with a continent that will rarely be wholly for, or wholly against, specific, American, foreign policy initiatives. Such a sensible middle course steers between the Scylla of not caring about bringing along allies, and the Charybdis of allowing a perpetually divided Europe to scupper all American diplomatic and military initiatives.
For such an approach to work, it is essential to view Europe as less than a monolithic entity. The differences in approach the Bush administration took regarding the Kyoto global warming treaty and the controversy over missile defense are instructive. By condemning out of hand the Kyoto agreement and offering no positive policy alternatives, the Bush administration found itself in a public relations disaster in its early days. By failing to engage the Europeans, the White House unwittingly succeeded in uniting them. Embracing the learning curve in the wake of Kyoto and refusing to believe reports that 'Europe' was implacably opposed to American desires to abrogate the ABM treaty and to begin constructing a missile defense system, the White House sent its representatives to the capitals of Europe where they found the 'European' stance on missile defense to be predictably far more fragmented than had appeared at first glance. Intensive diplomatic efforts led Spain, Italy, the UK, Poland, Hungary and ultimately, Russia, to embrace the administration's initiative to one degree or another. By searching out potential European allies at the national level, Washington engaged in successful cherry-picking and avoided the kind of diplomatic and public relations disaster that had occurred in the wake of Kyoto.
Ironically, this realist policy actually calls for more diplomatic and political engagement with Europe at a national level, even if Brussels is to be generally taken less seriously. As the Kyoto episode makes abundantly clear, in order for cherry-picking to work for the U.S., it is vital to note divisions in 'European' opinion based on differing conceptions of national interest. America should be constantly engaged in evaluating differences within Europe in order to still be able to work with allies, bringing along a coalition of the willing on any given policy initiative. Europe, such as it presently exists, suits general American interests - its member states are capable of assisting the U.S. when their interests coincide with America, yet it is feeble enough that it cannot easily block America over fundamental issues of national security. Cherry-picking as a general strategy ensures the endurance of this favorable status quo.
Militarily, such an approach explains present efforts at NATO reform. Beyond the sacrosanct Article V commitment, the future of NATO consists of coalitions-of-the-willing acting out-of-area. Here, a realist cherry-picking strategy confounds the impulses of both unilateralists and strict multilateralists. Disregarding unilateralist attitudes towards coalitions as often not worth the bother, this strategy calls for full NATO consultation on almost every significant military issue of the day. As was the case with Iraq, if full NATO support is not forthcoming, realists would doggedly continue the diplomatic dance, rather than seeing such a rebuff as the end of the process, as many strict multilateralists would counsel. A Combined Joint Task Force (CJTF) where a subset of the Alliance forms a coalition of the willing to carry out a specific mission using common NATO resources would be this strategy's second preference. If this too proved impossible, due to a general veto of such an initiative, a coalition of the willing outside of NATO - composed of states around the globe committed to a specific initiative based on shared immediate interests - would be the third best option. Only then, if fundamental national interests were at stake, should America act alone. Cherry-picking is a way around what has become a cartoonish debate, as very few decision-makers are either entirely unilateral or multilateral in orientation; the world is simply more complicated than this.
While agreeing with unilateralists that full, unqualified approval of specific missions may prove difficult to diplomatically achieve with NATO in the new era, cherry-pickers disagree with them about continuing to engage others at the broadest level. For, as the missile defense example illustrates, there are almost always some allies who will go along with any specific American policy initiative. That is, if they are genuinely asked. By championing initiatives such as the CJTF and the new NATO rapid deployment force, the Bush administration is fashioning NATO as a toolbox that can further American interests around the globe by constructing ad hoc coalitions of the willing that can bolster U.S. efforts in specific cases.
Less developed than the NATO process, free trade coalitions of the willing hold out intriguing possibilities for a future that may well see the breakdown of the Doha free trade process. As with NATO, there is no doubt that a comprehensive, all-inclusive liberalizing deal built around the Doha process (involving agricultural, services, and manufacturing liberalization) would best suit both the world and the United States. However, given the great disparities in world opinion over the efficacy, and even the definition, of free trade, the United States must be prepared to enact free-trading coalitions of the willing if the Doha round stalls over European failures to respond to the developing world's demand for significant agricultural liberalization. Certainly, the 'free trade by any means' mantra emanating from United States Trade Representative Bob Zoellick's office is an indication that the Bush administration is moving in this direction.
Beyond efforts to make the regional Free Trade Area of the Americas (FTAA) and bilateral deals with countries such as Singapore, Chile, and Australia viable, the Bush administration needs to embrace the idea of a Global Free Trade Association - a coalition of the willing determined to maximize trade liberalization throughout its member states. States around the globe that meet certain, predetermined, numerical criteria relating to trade policy, capital flows and foreign investment, property rights, and regulation would automatically qualify for the grouping. Members would, thus, select themselves based on their genuine commitment to a liberal trading order. Given the politico-economic commonalities such a grouping would share, it is to be hoped that the GFTA would allow for the freer movement of capital within the grouping, establish common accounting standards, set very low rates of subsidies across the board, and diminish overt and hidden tariffs. What must not happen to global trade if the Doha round stalls is that the U.S. takes its ball and goes home; again a coalition of the willing, this time in trade, is the way forward.
Politically, American policy-makers must ignore soothing EU communiqués and recognize that Europe speaks with many voices. For example, during the Iraqi crisis, while France, Germany, Russia, and Belgium led opposition to the war, Britain, Spain, Italy, Poland, and most Central and Eastern European governments ignored Paris and supported the American position. Indeed, there is a growing divide on issues of war and peace between more traditional European social democrats and the more modern, aggressive Blairite centrists on the continent. New Labour will remain available as a central ally in assembling coalitions of the willing in the future.
In addition, the cherry-picking strategy is the best way to combat French efforts to challenge American predominance. While it is certainly true that the Paris-Berlin-Moscow anti-war coalition resembled Dorothy's friends in the Wizard of Oz (each of the countries lacks something to be a great power on its own-Russia, a first-world economy; Germany, real military power; France, raw materials and an extensive industrial base), it is also true that such a coalition taken together has all the attributes of a balancing pole of power, with France providing the political and ideological leadership, Germany the economic power, and Russia the military wherewithal. While winning over Paris in a fundamental way is hopeless in the near term, both Germany and Russia remain at least as attuned to Washington as to Paris. By working together on a case-by-case basis, and not forcing Germany and Russia to choose between France and the U.S., Washington can effectively dilute the prospects of such a permanent coalition forming. Cherry-picking allows the Germans a way out of their self-inflicted diplomatic isolation, just as it allows Russia a chance to regain momentum in what has been a blossoming relationship with the U.S. I think National Security Adviser Rice was incorrect when she recently said, "Punish the French, ignore the Germans and forgive the Russians." A cherry-picking strategy would lead to a different conclusion. "Ignore the French (and work with them where possible), and engage the Germans and the Russians on a case-by-case basis." This is by far the best way to secure America's diplomatic advantage in the wake of the Iraq war.
Nor should America be seen to actively divide the European allies-such an approach would merely throw Germany into the arms of France. During a recent conference in Paris, when challenged by a member of the French foreign ministry that my plan was dividing Europe, I replied that I left that to President Chirac-that perhaps Chirac's threats to keep pro-American Central and Eastern European states out of the EU if they did not tow the French line on Iraq might be more at fault than my policy proposals. I was merely trying to cobble together coalitions of the willing based on the fact that the most interesting diplomatic result of the war was a Europe versus Europe reality, not Europe as a whole standing against the United States. Cherry-picking forces no one to irrevocably choose between Paris and Washington; it engages countries on a case-by-case basis merely by dealing with Europe as we find it-divided, weak, but on a country-by-country basis more than available to participate in coalitions of the willing. More ham-fisted efforts to divide Europe would be entirely counterproductive.
A strategy of cherry-picking will preserve the status quo, where the transatlantic relationship, despite fraying a bit at the edges, continues to provide common goods to both sides of the Atlantic. As such, the Europe of today suits America's long-term strategic interests. Cherry-picking will allow the U.S. to make the appearance of a Gaullist, centralized, European rival far less likely, while distributing enough shared benefits that the overall transatlantic relationship will continue to provide Europeans, as well as Americans, with more benefits than problems. Such an accurate assessment, fitting the realities of the world we now live in - where the United States behaves multilaterally where possible and unilaterally where necessary - is likely to endure.
Too often foreign policy practitioners successfully manage problems while wholly missing out on creatively taking advantage of opportunities. The Continental Europe of today presents us with just such an opportunity: it remains divided into Gaullist and Atlanticist camps, with the anti-American grouping splintering and discredited because of American success in Iraq. A Europe of many voices, where the nation-state is again seen as the primary unit of foreign policy decision-making, will best suit American interests well into the future. In addition, helping to retard the perpetuation of a Franco-German-Russian alliance designed to balance against the US must be seen as a primary American national interest. In both cases, the general cherry-picking modus operandi would seem to be the template that American policymakers can best use to take advantage of the present situation in Europe. In the particular case of the anti-American coalition constructed over Iraq, there seems to be ample evidence that Germany (and to a lesser extent Russia) is amenable to such a strategy. Cherry-picking is an idea whose time has come.
 Ivo Daalder, "A US View of European Security and Defense Policy," lecture given at USAREUR Senior Leadership Forum, Grafenwohr, Germany, March 7-9, 2001, (Brookings Online), 3.
 Robert Kagan, "Power and Weakness," Policy Review (online): 6.
 John Hulsman, "A Grand Bargain With Europe," The Georgetown Public Policy Review, .6(1), (Fall 2000): 73.
 Gerard Baker, "NATO's welcome imbalance in military might," Financial Times (February 7, 2002).
 "Transformation postponed," The Economist (February 16, 2002).
 "New studies highlight higher taxation and unemployment in Eurozone," Business for Sterling Bulletin, (49), (June 29, 2000).
 "Room to improve," The Economist (March 16, 2002).
 "Gerhard Schroeder's rocky new start," The Economist (November 16, 2002).
 John C. Hulsman and Sudabeh Koochekzadeh, "A Global Free Trade Association to Preserve and Expand the US-UK Special Relationship," Orbis, (Summer 2002).
 Based on these criteria the following countries would be eligible: Austrailia, Botswana, Denmark, Estonia, Finland, Hong Kong, Iceland, Ireland, Luxembourg, New Zealand, Singapore, United Kindom, United States.