Economic Growth

Is Europe a weak global player?

European Union flags fly outside the European Commission headquarters in Brussels June 15, 2005. The EU budget battle and salvaging the proposed constitution will top the summit agenda for the 25-nation bloc when it meets on June 16-17 at its Brussels headquarters. UNICS REUTERS/Thierry Roge  THR/CCK - RTREFSU

European Union flags fly outside the European Commission headquarters Image: REUTERS/Thierry Roge

Ana Palacio
Member, Spanish Council of State
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The liberal international order that has helped stabilize the world since the end of the Cold War is under strain. A revanchist Russia, chaos in the Middle East, and simmering tensions in the South China Sea are all symptoms of a system that is beginning to fray.

The drivers of instability are many. They include a shift in economic power from the West to the East, the weakening of formal institutions, and widespread disaffection in Western democracies. But, above all, two key developments that have been eroding the liberal international order: the United States’ withdrawal from global leadership and Europe’s prolonged crisis.

Recently, there have been signs that the US is beginning to reassert itself. After six years of “leading from behind” and drawing meaningless red lines, US President Barack Obama has started to seek out innovative, flexible arrangements – diplomatic and military – to respond to global threats.

In 2015, the Obama administration was instrumental in bringing about the Paris climate agreement and a deal to rein in Iran’s nuclear program. And, last week, US Defense Secretary Ashton Carter unveiled a proposed military budget for 2017 that signaled plans for a muscular global stance. The request included funding for naval operations in Asia, a restocking of the military arsenal depleted in the fight against the Islamic State, and a commitment to technological innovation.

The proposal’s centerpiece, however, was the quadrupling of US spending in Europe to “support our NATO allies in the face of Russia’s aggression.” Many in Europe might regard Carter’s announcement as cause for relief. After years of handwringing over Obama’s strategic “pivot” to Asia, even as Russia was stirring up trouble in Ukraine, Europe is once again a strategic focus for the US. But the deeper message is far less encouraging. The US is acting because its European partners have not.


This divergence is troubling. American engagement is necessary to provide momentum, but it is Europe’s weight that has served as the critical mass required to move the world’s liberal order in a positive direction. From the perspective of the European Union, the latest US security bailout raises the possibility that after more than two decades of growing prominence, Europe will lose its agenda-setting power.

In 2011, after NATO’s operation in Libya, which fully revealed the limits of Europe’s military capacity, then-US Defense Secretary Robert Gates visited Brussels. His message was stark: “If current trends in the decline of European defense capabilities are not halted and reversed, future US political leaders – those for whom the Cold War was not the formative experience that it was for me – may not consider the return on America’s investment in NATO worth the cost.”

In the years since, Russia has annexed Crimea and destabilized eastern Ukraine. Instability in the Middle East has sparked a large-scale migration crisis. Terrorism has reemerged as an important threat. And yet, for all the talk of streamlining and strengthening Europe’s defense capabilities, little of significance has been accomplished.

America’s change in calculus is not the result of Europe getting its act together; it reflects the recognition that the threat posed by Russia cannot be left unchecked. This point was driven home by a recent report by the Rand Corporation showing how vulnerable NATO’s Baltic partners – Estonia, Latvia, and Lithuania – would be to a Russian assault. As persistently low energy prices put the Kremlin under increasing pressure, there is a growing risk that Russian President Vladimir Putin could fan the flames of nationalism by lashing out once again.

On its surface, America’s decision to confront Russia recalls previous occasions when Europe proved unable to respond to challenges in its neighborhood – most memorably in Bosnia in the 1990s. But the current situation is more dangerous still; it is reminiscent of the Cold War, when Europe was an object and not an actor in geopolitics. The continent risks once again becoming the chessboard on which the US and the Kremlin play for advantage.

In 2001, the US accounted for one-fifth of the world’s economic output. Today, it accounts for less than one sixth of the global total. No matter how committed and innovative American leadership remains, the US by itself can no longer guarantee the liberal international order. It needs allies in the effort, and the EU, still the world’s largest economy despite years of stagnation, would make a perfect candidate – if only it would pull itself together.

During the twentieth century, Europe was America’s partner of first resort. Now, when it is needed once again, the EU is slipping toward the sidelines. Unless its leaders change course, the painful unraveling of the liberal world order will continue.

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