Die Zeit: European Union, reluctant superpower – get over it!

by Steven Hill, Die Zeit, June 23, 2016

(German language version, Du bist super – gewöhn dich dran!)

If you type the words “European Union” and “crisis” into the Google search engine, you instantly receive 115 million hits. When I did that back in 2009, before the eurozone crisis, “only” 58 million hits popped up. Is the EU really in that much worse shape today?

Apparently yes, according to the daily headlines. Brexit, Russia-Ukraine, refugees, terrorism, eurozone instability. Caught up in the heat of the moment, French Prime Minister Manuel Valls declared recently that Europe could “fall apart within months.”

But this is not the first time that political leaders and media outlets have declared the end of Europe. Prior to the economic crisis of 2008, the European economy was written off by most analysts as suffering from “Eurosclerosis” and condemned to decline. In the 1990s, The Economist dubbed Germany the “sick man of Europe,” and other media doomsayers warned of a future of rising unemployment, crime, and taxes to “a level not seen since the Weimar Republic.” Yet now a prospering Germany has become a global player.

Yes, the EU is juggling a number of daunting situations, but that’s what superpowers do – they deal with one crisis after another, year after year, some of them domestic and others international. A superpower by definition occupies a big corner of the world, in which messes happen and things have a tendency to fall apart. As Josef Joffe pointed out in his book “The Myth of America’s Decline,” the pundits have wrongly predicted the fall of a superpower before.

So what then does being a superpower mean? It means having both the capacity and size to make a difference on the world’s stage, and ideally to help solve global problems. Does the EU really qualify?

Emphatically yes. First, the EU is powered by one of the world’s great economic engines. Even with the eurozone crisis, what I call the EU-Plus (EU28 + Norway and Switzerland) still has the largest economy in the world, producing a quarter of the world’s gross domestic product. Indeed, according to World Bank figures, the EU-Plus economy is larger than that of the United States and India combined. It has more Fortune 500 companies than the U.S., India and Russia combined, and some of the most competitive national economies according to the World Economic Forum (European countries hold 13 of its top 25 rankings).

This vitality extends to small and medium-sized businesses (SMEs), which provide two-thirds of Europe’s private sector jobs and 85% of net job growth (in the US, SMEs only provide half the jobs). I hear many leaders complaining, “Europe isn’t innovative enough. Where are the European Facebook’s, Google’s and Apples?” But those companies actually don’t create that many jobs, since they are using software and algorithms to replace human workers. You want innovation? Take a look at Germany’s Mittelstand companies.

In another display of bold innovation, Europe has led a small revolution for greater economic democracy and a broadly shared prosperity, based on practices like codetermination, works councils, effective labor unions, and the “visible hand” of an active government that guides the “social capitalist” economy.

But it would be a mistake to measure superpower status purely in economic or geopolitical terms. The 21st century world is facing two immense challenges: with China, India and Brazil rightly demanding their seats at the table, how do we enact a desirable quality of life for a burgeoning global population of nearly 8 billion people?  And how do we accomplish that in a way that does not burn up the planet in a carbon-choked atmosphere of our own creation? Creating economic as well as ecological sustainability – preserving our “EconoEcoSphere” — is one of the defining challenges of our time.

The EU has been the world’s leader in this crucial endeavor. Led by Germany and its ambitious Energiewende program, Europe has moved forward vigorously with renewable energy technologies like solar and wind, as well as efficient mass transit and “green design” in everything from public buildings, homes and automobiles to low wattage light bulbs, motion sensor lights and low flush toilets. In the process, member states have created hundreds of thousands of new green jobs.

Unquestionably, Europe’s potency and reach have limits. German-led austerity for the euro zone has had limited success in recovering from the global economic collapse of 2008; Greece in particular has paid a steep price. Russian adventurism in Ukraine, a flood of refugees from the near-abroad, and now the possibility of UK secession have exposed existing tensions and fault lines, north-south and east-west.

Also, the classic idea of a superpower includes military might. President Obama has lately accused the EU of being a free rider when it comes to „hard power“, that it more or less relies on the US to step in militarily. But Europe isn’t the military weakling that some people believe it to be. Even not counting the UK, the EU states collectively have one of the largest military budgets in the world, with well over a million soldiers in uniform, substantial military hardware and  nuclear weapons. And second, military hard power is sometimes counter-productive. Would a military response to Russia’s invasion of Ukraine really have yielded better results than the EU’s diplomatic efforts? And what have the bombardments in Syria achieved, apart from creating millions of refugees?

Part of the ongoing struggle is a natural consequence of Europe’s institutional incoherence. The E.U. is governed by an odd form of quad-cameralism between four indistinguishable chambers:  the European Commission, the European Council, Council of Ministers and the European Parliament.  Each of these even has its own president – why not call one a premier, another a prime minister or regent? Even a superpower only gets one president!

This overly complex system of governance leaves even the most ardent europhiles confused. Partly for this reason, German chancellor Angela Merkel, as the head of the largest member state, has been thrust by recent events into the role as the de facto prime minister of Europe. Yet how does a chancellor of Germany rise above domestic passions and politics to do what is best for Europe, in the absence of clear-cut institutional coherence at the EU level?

In her makeshift role, Merkel has done an admirable job in certain respects. But she also has made mistakes, in part because her role as the EU’s prime minister conflicts with her domestic priorities as chancellor. Pandering to national passions, she unwisely joined French President Nicolas Sarkozy in telling Turkey that its bid for EU membership was blocked. Now Merkel is regretting that lapse of judgment, and Europe is paying a higher price.

But the other two superpowers, the US and China, also have had to endure their own ongoing lapses and institutional shortcomings. The US has many admirable qualities, but it also suffers from its own immigration woes, rising inequality and an eroding safety net. Internationally President Obama still carries a big stick, yet it’s smaller than previous US presidents — and its use sometimes seems to make matters worse. NSA spying and surveillance abuses, as well as Bush-era torture of prisoners at Abu Ghraib, have undermined cherished values and diminished America’s appeal. US politics is plagued by a degree of paralysis that seems almost European-like, even though the US has a well-established federal union. All of these tensions have boiled over and resulted in the phenomenon of Donald Trump.

Meanwhile China’s “communist capitalism” hybrid remains an authoritarian puzzle of immense contradictions. A growing middle class is still proportionally small compared to the vast numbers of poor, even as inequality, corruption and cronyism thrive. Impressive levels of industrial production have resulted in astounding levels of ecological ruin.

Strong executive leadership, it turns out, is only great when it leads in the right direction. Being a superpower isn’t always super, nor is it for the faint-hearted. In comparison, the EU doesn’t always look so bad.

Yet Europeans are stuck in a hyper-self-critical mentality that still seems to view Europe as the junior Cold War partner, sitting in the backseat while America sits up front driving the vehicle. Sitting in the backseat has its benefits; you don’t have to take much responsibility for the direction of the vehicle, and you can always defer the hard questions to the driver. But with the US on the edge of driving over the cliff via the Trump option, it is time for Europe to put forward more boldly its own brand of leadership and vision. Yet this will remain a challenge without a greater degree of institutional coherence and competence, which evolve slowly over decades.

To understand Europe’s present and future, I find it helpful to revisit the past — of the young United States of America. In 1789, this nation was torn by regional tensions and sovereign-minded member states that pushed back against central government and ever closer union. Initially young America had no single currency — each state, even individual banks, used their own.  Americans were so suspicious of central government that President George Washington, who was a military hero, dared not propose allocating funds for a standing army. People were so against federalism that the first national tax, which was levied on whiskey – chosen because it seemed uncontroversial – led to open rebellion in Pennsylvania, prompting President Washington to march troops there.

Finally, a full 70 years after its first government, America fought a bloody civil war over “states’ rights” — whether a central government could supersede the member states over a charged issue like slavery. In short, it took many decades for the US to solidify as a nation, and during that time the economy suffered at least seven bank and financial crises that make today’s euro difficulties look mild. One could still see these centrifugal tensions reflected in the 1960s during the US civil rights era, and even today in Donald Trump’s candidacy and the anti-government Tea Party movement. One can still see those centrifugal tensions present in the US today.

While this comparison is instructive, it is also imperfect. The European Union has divisions that are rooted in centuries of conflict. It is a miracle that it has come this far. But when you hear the next “Europe is dying” headline, remember that “old Europe” actually is quite young. The EU can still survive David Cameron’s folly and Viktor Orbán’s follies, and a few million refugees, and radical Islamic terrorism, and too much austerity – as long as the European appetite for union remains steadfast, and as long as the heart of the enterprise remains beating.

Watching the EU is like observing a planet in formation – a work in progress, on a decades-long trajectory, which at this point can be said to have reached “the end of the beginning,” to borrow Winston Churchill’s useful phrasing.

[Steven Hill is a journalist and the Holtzbrinck Fellow at the American Academy in Berlin. He is the author, most recently, of Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers.]


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