Europe Takes the Western Crisis Lead by William Pfaff

Europe Takes the Western Crisis Lead

William Pfaff
Paris, October 16, 2008 – Events since the beginning of August have made a deep impression on West European perceptions of European possibilities and European-American relations, now and in the future.

Accustomed to sixty years of deference to Washington's leadership (and sometimes its intimidation), Europeans justified this to themselves by the overall success of the American economic system, into which they were drawn by the Marshall Plan following the second world war, the immense development of transatlantic trade and financial integration, and since the 1990s, by globalization.

Their political subordination also had a wartime and postwar origin, reinforced by American patronage of the European Union, the insecurities of the cold war, NATO, and by simple political inertia and fear of destabilizing change.

Most important has undoubtedly been the profound loss of self-confidence and the crippled ambition inflicted upon European civilization ever since the uncontrollable blood-letting of the first world war. Americans, isolated from all that, perhaps knew better how to run the world.

The United States, as Richard Holbrook observed several years ago, became and has remained in certain respects "a European power" ever since the second world war. Europeans have often grumbled, and Charles DeGaulle during his 1950s presidency successfully reestablished French political and strategic autonomy. But France's critical position versus the U.S. has had relatively little serious consequence except by de-legitimating, so to speak, the Bush Administration's invasion of Iraq in 2003, forcing Washington to give up the attempt to win UN Security Council approval for that war.

That was six years ago, and Nicolas Sarkozy, when elected France's president in 2007, proclaimed his admiration for the U.S. and his intention to restore France to full NATO membership. But since then, much political and financial drama has occurred.

Europeans and European governments alienated from America's Iraq and Palestine-Israel policies, its use of torture and illegal imprisonment, and now being drawn by NATO towards the intractable Afghanistan-Pakistan tragedy, have become increasingly hostile to military involvements at America's side. Whatever their doubts, though, America's best friends in Europe this year mostly convinced themselves that Barack Obama was sure to be elected president, and that as Americans once sang of the Democratic presidential candidacy of the unlucky Alfred E. Smith in 1928, "Happy Days Will Be Here Again."


The Georgia fiasco in August, resolutely but unconvincingly rationalized as unprovoked Russian aggression by American supporters of further NATO expansion, confirmed doubts about American foreign policy judgement. While George Bush stayed at the Olympic Games, Nicolas Sarkozy, current president of the European Union, immediately flew back to negotiate with Russia a ceasefire in Georgia, European Union observers, and the outlines of a lasting settlement.

But political mistrust proved easier to discount than mounting signs of American government and financial community incompetence, precipitating the still unstaunched American and global credit crisis. No end seem near to the international crisis, since bank bankruptcies and emergency government financial interventions continue, whose ultimate success and costs are unforeseeable. But in these circumstances foreigners could see little in Washington but confusion and incompetence.

Treasury Secretary Henry Paulson, recently of Goldman Sachs, appeared to have been placed in charge of the U.S. government. He first recommended that the financiers who created the crisis be given $700 billion in public money to write off their own companies' bad debts. Congressional insurrection stopped that.

A new plan was offered, stuffed with electoral "earmarks" for Congressmen. Paulson named a young Goldman protégé, a recent business school graduate, to take charge of who would receive the rescue funds. The Federal Reserve Chairman seemed out of the loop. President Bush (I believe it was Gail Collins of the New York Times who said this first) popped out of the White House once a day, as from a cuckoo-clock, to make an announcement no one paid attention to.

In these circumstances, some Europeans seem to have decided that the postwar era of American leadership is over. British Prime Minister Gordon Brown temporarily nationalized British banks, took control of them, fired some of their executives, and refinanced them. Nicolas

Sarkozy immediately invited Brown (not a member of the Eurogroup), Angela Merkel, and the other European chiefs who are Eurogroup members, to Paris to agree to more or less the same policy, thus creating the framework for a (hitherto unthinkable) European economic government.

Washington then tried to copy the European program, but on free-market principles (no socialism in America!), calling in the top American banks and giving them money for preferred shares, with results as yet unknown.

The factor of uncertainty in Europe is that in January the Czech Republic takes over the EU presidency, and the Czech president and prime minister dislike the European Union.

Some have suggested that the EU somehow contrive to keep Sarkozy on, with him and Merkel in charge. Perhaps the Irish could be persuaded to take back their veto of a European constitution so that a permanent president could be elected before January. But that is unlikely. At least a year of leaderless Euro-American drift seems ahead.

© Copyright 2008 by Tribune Media Services International. All Rights Reserved.





This article comes from William PFAFF
http://www.williampfaff.com

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