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Strategic Choices: Why Europe Still MattersBlaine D. HoltPublished online: 10 Jun 2013.

To cite this article: Blaine D. Holt (2013) Strategic Choices: Why Europe Still Matters, American Foreign Policy Interests: TheJournal of the National Committee on American Foreign Policy, 35:3, 160-168

To link to this article: http://dx.doi.org/10.1080/10803920.2013.798188

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Strategic Choices: Why Europe Still MattersBlaine D. Holt

ABSTRACT Financial crisis in Europe, China rising, and a rebalancing

United States, against a backdrop of depleted resources, are driving the

‘‘tectonic plates’’ of geopolitics. How the world’s top three economies react

to these momentum shifts will affect or influence all regions. In making this

observation, the article examines the historical context of the three and how

they arrived at the geostrategic crossroads they sit at today. The author

makes the case that U.S. policymakers should take careful note of China’s

economic muscle being flexed on the financially-stricken European conti-

nent and should craft policies that strengthen the U.S.–Europe bond.

KEYWORDS Asia-Pacific; Bretton Woods; defense; economic A2AD; EU;

euro zone; foreign direct investment; The Great Recession; Marshall plan; NATO;

political–economic; rebalancing; SACEUR; transatlantic bond; tripolar

On a chilly February day in 1992, the European Council meeting in

Maastricht, Netherlands, completed the final draft of the Treaty of European

Union, formally creating a new, supra-national structure of sovereign states,

obligated to common economic, legal, and security standards. Its propo-

nents envisioned an enterprise certain to achieve and maintain a sharply

ascendant trajectory—a euro zone even greater than the sum of its parts:

extremely formidable economically, highly influential geopolitically, and,

contrary to a key concern expressed by its many critics, capable of imple-

menting economic reforms and effecting social integration within and

among its 17 member states. The mood was euphoric. After all, the Conti-

nent had survived two brutal world wars and years of nuclear trauma in a

cold war, fracturing geographies and ideologies alike, all in less than a

century. A bright and happy future was at hand. In the heady spirit of

Maastricht, the next few years added several agreements expanding the

union, producing a common currency, and building new structures for

common governance. As the 1990s wore on, Europe developed a new con-

fidence and influence on the world stage, both economically and strategi-

cally. War in the Balkans, the 9=11 attacks, conflicts in Afghanistan and

Iraq, along with persistent financial crises were all in the future, and the past

seemed firmly buried. Nothing describes the early days of the European

Union better than Europe’s anthem: ‘‘Ode to Joy,’’ an orchestral.

Fast forward to 2013. The sunny promises of 1992 have yet to be fulfilled.

Instead, Europe has experienced two decades of conflict and a bruising

collision with an ongoing, and pervasive, financial crisis. On the surface,

the numbers are encouraging: the union’s reporting body, Eurostat, lists

This article not subject to U.S. copyrightlaw.

The views expressed are those of theauthor and do not necessarily reflect theofficial policy or position of the Depart-ment of the Air Force, U.S. EuropeanCommand, the Department of Defense,or the U.S. government.

Blaine D. Holt is a Brigadier General in theUnited States Air Force and is a formerMilitary Fellow at the Council on ForeignRelations.

American Foreign Policy Interests, 35:160–168, 2013ISSN: 1080-3920 print=1533-2128 onlineDOI: 10.1080/10803920.2013.798188

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the Continent as the world’s largest economy with a

population of 500 million from 27 member states

producing a hefty $16.566 trillion (USD) Gross

Domestic Product (GDP).1 Viewed in detail, how-

ever, complexities mount. National loyalties and

ethnic rivalries proved more resilient than the archi-

tects of the union envisioned. Combined with design

flaws in the agreement establishing the euro cur-

rency, now used by 17 countries, fissures are emerg-

ing, conceivably condemning the consortium to

failure. Long term, another vexing and intractable

issue is Europe’s demographic situation. Discounting

immigration, birth rates in Europe have declined

dramatically in the post-war era; the economic and

security implications are alarming. Will the Europe

of the future have the numbers to produce the

wealth to care for a burgeoning population of elderly

citizens while simultaneously providing for robust

security? And, from the perspective of an America

embarking on new policies designed to acknowl-

edge the rising importance of Asia, does it matter?

Ideally, in today’s globalized international com-

munity, a secure and prosperous Europe is certainly

in the best interest of all. However, with operations

in Afghanistan, Libya, and Mali continuing to drain

the Continent’s under-resourced military forces in

an era of falling credit ratings and soaring unemploy-

ment (11.7 percent across the euro zone), the Conti-

nent could well find autonomous international

engagement while maintaining domestic harmony

to be a challenge.2

The timing could not be worse. The United States is

clearly facing a world of new international tensions

and escalations demanding it reexamine priorities,

especially in view of a rising domestic debt and calls

for reducing spending. In short, U.S. willingness and

ability to respond to the European crises on par with

historic bold initiatives like the Marshall Plan or the

Bretton Woods agreements are all but nonexistent.

The U.S. strategy document released last year, ‘‘Sus-

taining U.S. Global Leadership: Priorities for 21st

Century Defense,’’ acknowledged Europe while call-

ing for a rebalancing toward the Asia-Pacific region:

Europe is home to some of America’s most stalwart alliesand partners, many whom have sacrificed alongside U.S.forces in Afghanistan, Iraq, and elsewhere. Europe is ourprincipal partner in seeking global and economic security,and will remain so for the foreseeable future. At the sametime, security and unresolved conflicts persist in partsof Europe and Eurasia, where the United States must

continue to promote regional security and Euro-Atlanticintegration. The United States has enduring interests insupporting peace and prosperity in Europe as well as bol-stering the strength and vitality of NATO, which is criticalto the security of Europe and beyond.3

Europe has been our key and most reliable ally for 70

years—and is irreplaceable. Can and should a United

States facing economic trials and intense budget

shortfalls maintain its leadership and partnership

roles on the Continent? What is important is to con-

sider the dynamic nature of foreign policy and the

modern integration of diplomatic, commercial, and

military spheres of influence. Certainly, a substantial

decline in U.S.–European involvement would engen-

der the type of vacuum that could be viewed as a

strategic opportunity by other powers or regions.

For example, China is emerging as a European stake-

holder with compelling economic interests in the

Continent as its second-most-important trading

partner.4 Might not the malaise in Europe present

the Beijing leadership with strategic options that

mesh well with their vision of a rising China? The

same could be said of Russia, currently involved with

the intricacies of the Cypriot banking debacle. Seen in

that light, today’s Europe could not matter more.

Nonetheless, it is useful to examine the issue from

various points of view before new policies reach a

final Rubicon. With historical, cultural, economic,

and security issues tightly interwoven, getting it right

with Europe is vital.

Modern Europe has one constant, missing from the

Europe of every other era since the fall of Rome—

namely, a partnership with the United States of

America. After a disastrous retreat from the inter-

national stage in 1919, post–World War II America

made a courageous bet that a prosperous Europe,

well-financed for rebuilding, would be well-

positioned to defend against communist aggression.

In the early post-war period, this initiative eclipsed

virtually every other in the national interest as the

Soviet Union sought to consolidate and expand its base

in Eastern Europe. The policy led to seven decades

now almost universally viewed as the Pax Americana.

Throughout, American taxpayers funded military

bases in Western Europe, all under the umbrella of

one of the most successful international alliances in

history, the North Atlantic Treaty Organization

(NATO). The first NATO secretary, General Lord

Ismay, was pithy in defining the early goals. ‘‘NATO

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was established to keep the Americans in, the Russians

out, and the Germans down.’’5 Today’s NATO, globally

engaged in operations from Kosovo to Afghanistan, is

only a reflection of its humble, yet perilous, beginning.

REBALANCING IN THE TWENTIETH

CENTURY: AMERICA COMESTO EUROPE

The rationale for America’s bold and unpre-

cedented moves after World War II was firmly rooted

in the early years of the twentieth century. America’s

entry into World War I in April 1917 marked a signifi-

cant departure from a sharply limiting foreign policy

and military action supporting American commercial

interests. It took significant aggression delivered by

the German U-boats to persuade President Woodrow

Wilson into entering the killing fields of The Great

War. The Wilsonian school of diplomacy was born

as war ended, and, for the first time, an American

president assumed a world leadership role, specifi-

cally at the Paris Peace Conference, in defining the

peace and in forming new international peace initia-

tives. The new spirit of internationalism was short-

lived as Wilson’s health rapidly declined and the

isolationist Senate formally rejected the cornerstone

of his post-war policy: The League of Nations. The

turning away from Europe was so complete as to

form the entire basis for the next administration’s

campaign for the White House. Warren G. Harding

coasted to a comfortable win with one simple slogan:

‘‘A Return to Normalcy.’’6 U.S. influence in Europe

faded almost immediately after the official signing

of the Treaty of Versailles in 1919. Poorly crafted

and badly implemented, the treaty gradually broke

down over two decades, as the Weimar Republic

gave way to Hitler’s Wermacht, with tanks and men

racing across the Continent in a new type of warfare.

Reluctantly, the United States entered World War II

from a position of almost scandalous weakness.

When Gen. George C. Marshall assumed command

in 1939, the U.S. Army was seventeenth largest in

the world with just over 200,000 regular soldiers, an

outdated and limited supply of weapons, an aging

officer corps, and an almost nineteenth-century con-

cept of war.7 At the war’s end, the United States

emerged as the sole power with an intact domestic

infrastructure, a vast arsenal of modern weaponry,

an innovative and modern command structure, and,

above all, having learned an indelible lesson about

the costs of unpreparedness in both lives and treasure.

Unlike the war to end all wars, the agreements

ending World War II were carefully crafted with an

eye toward history and the potential folly of human

hubris. The United Nations essentially reincarnated

the old League of Nations, while the Marshall Plan

and the Bretton Woods Agreement dealt with the

post-war economies of all the war powers, enemies

and allies alike. This time, the United States accepted

the role of Great Power and the responsibilities that

come with it; the world slipped easily and seamlessly

from nineteenth-century Pax Britannica to twentieth-

century Pax Americana almost overnight.

Challenges in Berlin and later in the Korean

Peninsula slowed American demobilization under

President Harry Truman and provided the first chal-

lenges to the post-war agreements, while bringing

into sharp relief the new bipolar world. The Cold

War and the hot proxy wars that followed galvanized

containment strategies, such as those found in docu-

ments like NSC-68.8 Through the 1950s, as Western

Europe’s economies prospered, a tense peace held

while 450,000 U.S. soldiers, sailors, marines, and

airmen stood alongside NATO forces to guarantee

stability. European institutions, including the European

Economic Community (EEC), the Western European

Union (WEU), and eventually the present-day

European Union (EU), took root—allowing transat-

lantic commerce to soar.

On a parallel track with German and Italian

democracies, American investment solidified pros-

perity and capitalism. By the 1960s, the publicly

funded security apparatus that included the incred-

ible success of the $13 billion ($115 billion adjusted

for inflation) Marshall Plan, which spanned 1948–

1951, along with the post-fascist development of the

rule of law, attracted U.S. private capital in a sort of

latter-day gold rush.9 A new generation of European

leaders took note of the growing American economic

influence with varying degrees of resentment and

acceptance. One prominent rival of Charles de Gaulle—

Jean-Jacques Servan-Schreiber—distilled the argument

in an extremely influential 1968 book, The American

Challenge (Le Defi Americain). The author sounded

a clarion call for Europeans to either move to

a more cohesive federal union or succumb to

American dominance.10 ‘‘The evil is not the capacity

of the Americans, but rather the incapacity of the

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Europeans,’’ he wrote in response to the deluge of

U.S. foreign direct investment. Instead of the familiar

historic call (on both sides of the Atlantic) for

isolationism, he advocated decisively for a united

Europe, better positioned to manage the economic

dominance, even aggression, of an American jugger-

naut.11 When asked by the Washington Post why

Europe did not succumb to the America’s devouring

the Continent economically, he answered without

hesitation: ‘‘They listened to my warning. They did

what I told them.’’12 Despite the influx of billions

upon billions in U.S. investment capital, Europe not

only maintained its independence, it united, albeit

somewhat imperfectly, giving birth to a new currency

in the process.

THE COMPLEXITY AND NUANCE

OF VICTORY

At the Malta Summit in December 1989, presidents

Mikhail Gorbachev of Russia and George H. W. Bush

of the United States produced the closing bracket of

the post-war period, declaring in a joint statement

the effective end of the Cold War; two years later,

the Soviet Union was officially dissolved leaving the

United States of America as the sole superpower and

ushering in the international system that exists today.

The success of the U.S.–European alliance has

emerged as a sort of twenty-first-century morality

play, displaying a triumph of success along with the

seeds of potential human failure. The economic

machinations of the decades of EU advances have

resulted in a new sort of rule book integrating Eur-

opean and American economic interests not merely

on the macro level of international government rela-

tions but on multinational corporate levels as well.

Together, the United States and Europe account for

more than 35 percent of the world’s GDP and, despite

the past decade of disruption, should continue to

dominate if the momentum carries through.13

THE PRICE OF THE PRIZE

The price to the United States and the American

people for 70 years of peace, prosperity, and stability

in Europe was dear. On the human level, the begin-

ning was tragic: 416,800 U.S. military personnel killed

in direct action during the war, with thousands more

maimed or injured.14 Literally, hundreds of billions of

U.S. taxpayer dollars (adjusted for inflation) were

dedicated to Europe’s reconstruction after the

war. The American bases that dotted the European

landscape functioned as human trip wires in the

bipolar world of Soviet–American competition—but

the stage was set for a new prosperity. As the twenti-

eth century waned, the uninterrupted trajectory of

ever-increasing prosperity seemed secure. Even the

wars of Yugoslav succession, much more brutal and

important to continental history (at least thus far) than

the Kosovo conflict and Macedonia scare, did little to

interrupt surging economies, buoyed by new tech-

nologies and accelerating productivity, on both sides

of the Atlantic. The real test of the transatlantic

alliance came after the millennium, when terrorists

attacked New York and Washington, D.C. Although

NATO quickly invoked Article V (a provision in the

agreement treating an attack on any one member as

an attack on all), it was apparent the real military

strength (and budgets) lay with the American forces.

Years of declining military budgets in Europe, in both

absolute terms and as a percentage of GDP, had taken

a toll on readiness. As the American and European

allies moved into Afghanistan to contain Al Qaeda,

the heavy lifting was relegated to U.S. and British

forces. As the decade wore on, nonmilitary weak-

nesses began to surface. The Great Recession, starting

in the United States in 2008, quickly emerged as a glo-

bal financial crisis—racing through Europe, exposing

massive debts and imploding economies. Europe is in

trouble and is, therefore, vulnerable.

Credit swaps and bundled subprime mortgages

were poorly understood derivative instruments in

the investment banking sector before they became

the kindling that fueled a malignant recession that still

haunts American and European economies. Persistent

and pervasive unemployment on both sides of the

Atlantic is stretching social safety nets and exacerbat-

ing deficits. By 2009, EU authorities were citing non-

compliant member states for overspent budgets and

bad banking practices.15 Clearly, North–South fault

lines could rupture Europe as Greece, Spain, Portugal,

Italy, and Ireland struggle with various forms of

austerity required to trigger European Union bailouts,

more and more of which resemble a draft on the

German checkbook. Will these efforts be successful?

The outlook is not encouraging. For example, in

December 2010, Greek prime minister George

Papandreou admitted that not only does Greek debt

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surpass 4300 billion, the country has a debt-to-GDP

ratio of 113 percent, almost double the 60 percent

limit officially permitted in the euro zone.16 Since

the prime minister’s candid admission, the crisis

has intensified—with the 2013 debt-to-GDP ratio

expected to exceed 135 percent in Greece and, for

the euro zone as a whole, to exceed 95 percent.17

Other economies in Europe’s southern tier are in simi-

lar straits. The seriousness of the situation is not lost

on either the political leadership in Beijing or officials

at the People’s Bank of China, and the State Adminis-

tration of Foreign Exchange (SAFE), where concerns

about their largest debtor country, the United States,

were already high.18 A potentially precarious euro is

certainly ringing alarm bells in China, especially as

the country seeks alternative investments to hedge

against weakening U.S. sovereign debt. Simply put,

a weak European Union is not in China’s best interest.

Given the most conservative estimate of Beijing’s

foreign currency reserves, any strategy employed to

protect Chinese commercial imperatives would be

well-financed. Will this be the new world order?

A CULTURE OF STRATEGY

China’s 5,000 years of history and the legacy of the

pre-Qin dynasty philosophers (770–476 BCE) such as

Guan Tzu, Lao Tzu, Confucius, Mencius, Mozi, Sun

Tzu, and Han Feizi are legendary. To this day, these

masters retain their influence—guiding modern lead-

ers, just as they did in charting strategies for the kings

and counselors of ancient Cathay. Chinese professor

Yan Xuetong argued in his most recent book, Ancient

Chinese Thought, Modern Chinese Power, that the

philosophies springing from Confucianism, Daoism

(Taoism), and Buddhism are valid as a basis on which

to formulate future Chinese thinking on strategy and

international relations.19 And, whether looking at

Sun Tzu’s The Art of War, the ‘‘Unrelenting Strategy’’

of the I Ching, Deng Xiaoping’s ‘‘24 Character Strat-

egy,’’ Hu Jintao’s ‘‘Harmonious Society,’’ or, most

recently, Wang Jisi’s ‘‘March West’’ strategy, it would

be hard to argue that the Chinese do not have a

culture that devises and supports long-term strategies.

In 1953, the first of China’s five-year plans (1st FYP)

mirrored Soviet-style centralized planning. Since

those early days of revolutionary rectitude, the new

China has adopted the same type of flexible pragma-

tism that served the empire so well over millennia.

The current Five-Year Plan (12 FYP), which sets

a path to 2015 and is a far cry from Marxist purity,20

is an example of China’s current global perspective

and strategic thinking. China’s ambassador to the

European Union, Song Zhe, has made a point of pub-

licly highlighting the great opportunities existing for

European countries in the 12 FYP, arguing China

will look for win-win cooperative initiatives with

Europe. He says China’s objectives of transitioning

to a consumption-driven economy with a robust

high-tech sector in full pursuit of clean energy

solutions open tangible economic opportunities for

Europe. A corresponding surge in Chinese foreign

direct investment (FDI) in Europe and greater access

on the mainland for European companies will also be

a great benefit.21 The flow of capital and trade

between China and the EU provides solid evidence

to back up Ambassador Song’s supportive declara-

tions to financially stressed Europeans. Part of China’s

pivot to Europe can be seen in trade figures. For

example, in 2010, trade in manufactured goods

increased a healthy 30 percent, year-over-year, to

4395 billion.22 In addition, China signaled the stra-

tegic importance of Europe by tripling its outward

FDI to EU countries to 47.4 billion, up from less than

41 million just five years prior.23

On the diplomatic front, the intent of the Chinese

government could not be plainer. In 2010, in reaction

to the euro crisis, both President Hu Jintao and

Premier Wen Jiabao flew to Europe to reassure lead-

ers across the Continent of China’s commitment to

stemming the crisis.24 Unfortunately for Europe’s cen-

tral banking elites, investments from China tend to be

concentrated in potentially lucrative commercial

operations rather than in the declining sovereign debt

of the Continent’s southern tier. Speeches and state-

ments from China’s leaders in Greece and Spain, as

well as written objectives in the new Five-Year Plan,

speak of an organized attempt to double trade by

2015.25 Current trade figures are on target, however,

clearly most activity will be the result of Chinese com-

mercial and industrial investment, along with some

liberalization of internal Chinese markets designed

to increase European exports.26 Clearly, the declining

economies of Europe will benefit from Chinese

actions in their battered GDP and employment stat-

istics. However, European leaders would doubtless

prefer increased bond purchases to commercial

investments.27 In the Rhodium Group’s recent seminal

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study, China Invests in Europe: Patterns, Impacts and

Policy Implications, experts Thilo Hanemann and

Dan Rosen deftly capture the upward bend in the

curve of China’s economic focus on Europe.28 They

expect the momentum for future Chinese investment

in the EU to only increase and urge EU leaders to

develop policies now to maximize the positive

aspects of increased integration, while mitigating

potential adverse aspects.29 Rhodium further postu-

lates: if the current trajectory holds, the amount of

FDI into Europe from China between now and 2020

could be conservatively estimated at between $20B

and $30B annually.30

What type of influence in European economic,

political, and security affairs will such a level of

economic throw-weight bring? Although the study

attempts to answer the question with a balanced

set of best and worst case scenarios, assessing

Chinese economic discourse with the EU overall

warrants caution by decision makers:

In addition to economic implications, we also consider thepolitical impacts of Chinese FDI in Europe. It is naturalthat Chinese officials might threaten to withhold directinvestment if they believed doing so could affectEuropean politics. Based on our analysis, however,Chinese firms are less subject to Beijing’s puppetry thanmany observers believe . . .

. . .That said, there is ample reason to anticipateattempts by Beijing to mix money with politics—theyalready have with Japan over rare earths, and Europe oversupport for crisis stabilization funds.31

What is clear is that Chinese investment and

involvement in Europe represent a way out of the

deepening economic crisis across the Continent.

With a centralized command and control economy,

China is well-positioned to use coercive economic

diplomacy rather than military force as the lever of

choice.32 A chilling reminder of coercive Chinese

political–economic pressure came in 2010, just one

year before the explosive growth in FDI to Europe,

when Chinese dissident Liu Xiaobo was named

a Nobel Prize laureate. Despite clear warnings from

Beijing, the award was presented. China responded

by convincing 18 nations to pull their representatives

from attending the ceremony and punished Norway

in the following months by imposing severe restric-

tions on Norwegian salmon exports to China. The

result: Norway’s market share shrunk by 60 percent,

while the overall demand for salmon in China rose

30 percent.33

ECONOMIC A2AD?

In military parlance, the types of regional capabili-

ties China is developing in its military are bracketed

under a category dubbed ‘‘Anti-Access Area Denial’’

or A2AD. Weapons in this realm, designed to keep

opposing forces at bay, range from antiship ballistic

missiles (ASBMs) to higher end antisatellite weapons

(ASATs). The concept of A2AD has expanded

beyond its military origins to cover the influencing

of strategic choices using a full range of options,

including military, diplomatic, cultural, economic,

and political. In 2010, Chinese direct investment of

$3 billion equated to approximately 45,000 European

jobs, implying China possesses a potential capacity

for economic A2AD. Clearly, influence of this type

can easily translate into a form of political clout,

possibly affecting Nobel ceremonies, and much

more.34 If the Rhodium estimate proves correct in

predicting a six-to-tenfold investment increase, the

possibilities for China’s maneuvering within the

European Union would increase exponentially. In

short, should Europe fail to mitigate debt and budget

challenges, while simultaneously depending on

Chinese investment for 4-to-5 million jobs, the results

could include a sort of retro-feudalism unimaginable

even 10 years ago. At the very least, Continental

leadership should focus on future policies, carefully

examining both pros and cons. A question emerging

is whether or not greater European access to internal

Chinese markets creates a virtuous circle of exported

goods balanced against an influx of cash into

Europe. Will the resulting profits be reinvested or

repatriated as the business climate directs or will

a gradual decline in sovereign power create a new

sort of proxy or vassal state? In analyzing the current

situation, it is prudent to look at the stated goals

inherent in contemporary Chinese policies:

. Hope for EU support in gaining Market Economy

status in the WTO before 201635

. Overtures to Iceland to gain access to the Arctic

Council to secure access to natural resources

and passage rites36

. Lifting the EU arms embargo in force since the

Tiananmen Square crisis in 198937

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Volkswagen, whose most important market for 60

years was Germany, will sell close to 1 million units

in its home country this year while selling 2.7 million

in China.38 While those concerned with China’s ris-

ing stature and influence in Europe would point to

troublesome anecdotes like these as harbingers of

the irreversible dependency, even further complica-

tions are in store with deeper integration between

China and the EU. For example, significant invest-

ments from the mainland and the resultant capital

at risk in Europe will leave the Chinese with their

own set of vulnerabilities in any long-term economic

strategy. Rhodium Group’s study posits China cannot

expect its economic strategy in Europe to give it

free rein in the Continent’s capitals and the EU’s

governance structures without inadvertently creating

economic levers that European leaders can use:

Greater presence of Chinese firms abroad will also makeBeijing more vulnerable to economic sanctions and otherpolitical pressures—just imagine Beijing’s dilemma in thecurrent Iran crisis if its banks had significant operationsin Europe and the United States. This new situation willgive Europe and the U.S. more opportunities to work withChina on a bilateral and multilateral level.39

For Europe and China, the key to successful

economic integration seems to be rooted in striking

the right balance. Such success could usher in an

age of partnership and prosperity on a grand scale.

If policymakers fail, however, the result of the

world’s number one economy being entirely depen-

dent on the world’s number three economy could be

disastrous. The numbers are just too staggering, with

implications for the entire planet. The old verity,

‘‘Measure twice, cut once’’ is true; effective policy is

paramount.

THE TRANSATLANTIC BOND: ANEVOLVING STRATEGIC

RELATIONSHIP

At World War II’s end, every element of national

power and tremendous, unwavering commitment

from the United States went into the reconstruction

of Europe, creating the largest economic relationship

the world has ever seen. After all, the United States

and Europe generate more than one-third of the

world’s gross domestic product. As Stanford’s Hoover

Fellow, Josef Joffe, put it, ‘‘It is the world’s anchor of

liberal democracy.’’40 Supreme Commander Allied

Forces Europe (SACEUR), Admiral James Stavridis,

affirmed this in his recent appearance before Con-

gress, when he testified: ‘‘one of the most important

reasons the relationship with Europe was so vital

was our shared values.’’41 A myriad of factors, from

globalization and intense competition for resources

to persistent economic crises, have leaders on both

sides of the Atlantic at a crossroads over the future

direction of the relationship. In the political–military

sphere, for all its shortcomings and rising dissatis-

faction in the United States over declining European

defense contributions, NATO, at 64 years old,

remains the world’s most consistent and effective

alliance among nations. Alongside the public and

private economic integration existing for more than

six decades, the transatlantic relationship is unrivaled

in terms of peace, stability, and mutual benefits

among its 28 member nations and beyond to greater

Europe.

As operations wind down in Afghanistan and

NATO comes home, the world should hope for

wisdom from its leaders in managing a traditional

post-war budget drawdown. This year, with NATO

countries struggling to overcome very real financial

challenges, the need for careful apportionment of

scarce resources is even more acute. Will their deci-

sions usher in a new era of prosperity built on new

and exciting industries and technologies or will the

West fade as so many civilizations have over the

millennia? Both sides of the Atlantic will soon know.

Given the realities of diminishing military resources,

the challenge ahead for policymakers on both sides

of the Atlantic will be to define a new way of preser-

ving and enhancing the transatlantic relationship—

with the values of SACEUR as the anchor. These

imperatives are not to stem or negate a rising China,

however, they do acknowledge the United States,

EU, and China as the world’s largest economies

and each will pursue what it perceives to be in its

best interest. Formulating multilateral and bilateral

policies among the three and maintaining a balance

among them are vital to all nations from an economic

and security standpoint. Scholars at the European

China Research and Advice Network (ECRAN), Bates

Gill and Andrew Small, boldly state in their study,

Untapped Trilateralism: Common Economic and

Security Interests of the European Union, the United

States and China, we now live in a ‘‘tripolar world.’’42

However, even though the big three account for

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more than 54 percent of global GDP, they stop well

short of urging a trilateral body.43 To tackle common

economic and security interests, convergent or

divergent, ECRAN advises that bilateral and existing

multilateral structures would be the most efficacious

means.44 Avoiding a formal trilateral structure,

ECRAN argues, provides more flexibility and trans-

parency to get at competitive and collaborative agen-

das. Whether or not current U.S. and European

military structures need further adjustment to meet

the challenges of a tripolar world, is solely in the

domain of political leaders in North American and

European capitals.

CONCLUSION

Europe still matters and very likely always will. As

defense budgets decrease and military forces are

repurposed globally, the debate about U.S. commit-

ment to Europe will continue on both sides of

the Atlantic. And, while those arguments ensue, the

reality remains China is on a rising vector and the

Asia-Pacific region continues to grow in importance.

The current economic problems on both sides of

the Atlantic dictate the old formulas no longer apply.

New ideas about the best deployment of resources in

Europe, whether diplomatic, economic, or military,

need to enter the debate. The goal of sustaining the

vibrant transatlantic relationship and the ready NATO

alliance needs urgent attention in North America and

Europe. The door is now open. In a recent New York

Times op-ed, former senior director of the National

Security Council Hans Binnendijk reports on a new

directive from the Defense Department to review

U.S. military strategy in response to budget reduc-

tions resulting from deficit reduction and seques-

tration.45 He predicts by the end of the review the

United States will call for one of two directions. The

State Department and Defense Department will coor-

dinate and support either ‘‘Offshore Balancing,’’

which would involve a withdrawal of forces from

Europe and the Middle East. Alternatively, the United

States might pursue a path called ‘‘Forward Partner-

ing’’ developed at National Defense University. This

would emphasize U.S. forward-force deployments

to enable partners to be interoperable with U.S.

forces while being primarily responsible for security

in their regions.46 However, military strategy has

traditionally been one element in a multilayered

approach to U.S. foreign policy. Whatever military

force decisions come out of future strategies, diplo-

macy as well as public and private economic plans

will need to be integrated to optimize U.S. outcomes

in Europe. If we are indeed waking up to a tripolar

world order, then recognition of Europe as a block,

making up the world’s largest economy and liberal

democratic values congruent with those of the United

States, will be to the benefit of China and the rest of

the global community of nations. The time has come

to make strategic choices.

Notes

1. European Union, Eurostat, http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=1&init=1&pcode=tec00001&language=en.

2. Benjamin Fox, ‘‘Unemployment Now the Main Problem inthe Eurozone,’’ euobserver.com, February 25, 2013, http://euobserver.com/economic/119170.

3. U.S. Department of Defense, ‘‘Sustaining U.S. Global Leader-ship: Priorities for 21st Century Defense,’’ January 2012,2–3, http://www.defense.gov/news/Defense_Strategic_Gui-dance.pdf.

4. Frederic Lerias, Mattias Levin, Myriam Sochacki, and Rein-hilde Veugelers, China, the EU and the World: Growing inHarmony (Luxembourg: Office for Official Publications ofthe European Communities, 2007).

5. Quoted in Geoffrey Roberts, Stalin’s Wars: From World Warto Cold War, 1939–1953 (New Haven, CT: Yale UniversityPress, 2006), 358.

6. Encyclopedia Brittanica, Harding: Return to Normalcy,speech, 1920, http://www.britannica.com/presidents/article-9116882.

7. John Nelson II, ‘‘General George C. Marshall: StrategicLeadership and the Challenges of Reconstituting the Army,1939–41,’’ February 1993, Strategic Studies Institute, http://www.strategicstudiesinstitute.army.mil/pubs/summary.cfm?q=358.

8. James S. Lay, Jr., National Security Council–68 (NSC-68),April 12, 1950, Harry S. Truman Library & Museum, http://www.trumanlibrary.org/whistlestop/study_collections/coldwar/documents/pdf/10-1.pdf.

9. Michael S. H. Heng, The Great Recession: History, Ideology,Hubris and Nemesis (New York: World Scientific, 2010), 128.

10. J.-J. Servan-Schreiber, The American Challenge (New York:Atheneum, 1968).

11. Martin Douglas, ‘‘J.-J. Servan-Schreiber, French Man of Ideas,Dies at 82,’’NewYork Times, November 8, 2006, http://query.nytimes.com/gst/fullpage.html?res=9F05E4DF1E3FF93BA35752C1A9609C8B63.

12. Ibid.13. International Monetary Fund, World Economic Outlook

Database, September 2011, http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/index.aspx.

14. National World War II Museum, Military Deaths for UnitedStates, http://www.nationalww2museum.org/learn/education/for-students/ww2-history/ww2-by-the-numbers/world-wide-deaths.html.

Volume 35, Number 3, 2013 167

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15. BBC News, ‘‘Timeline: The Unfolding Eurozone Crisis,’’ June13, 2012, http://www.bbc.co.uk/news/business-13856580.

16. Ibid.17. Christian Odendahl and William Oman, ‘‘Greece Outlook:

Recession Slows; Further OSI Conditional on Reform,’’Roubini Global Economics, March 26, 2013; ChristianOdendahl and William Oman, ‘‘Eurozone Outlook: Bad in2013; Better in 2014, but with Downside Political Risks,’’Roubini Global Economics, March 27, 2013.

18. Wieland Wagner, ‘‘China Expands Its Influence in Europe,’’December 14, 2010, Spiegel Online, http://www.spiegel.de/international/world/capitalizing-on-the-euro-crisis-china-expands-its-influence-in-europe-a-734323.html.

19. Yan Xuetong, Ancient Chinese Thought, Modern ChinesePower (Princeton, NJ: Princeton University Press, 2011).

20. Robert Ash, Robin Porter, and Tim Summers, ‘‘China, the EUand China’s Twelfth Five-Year Programme,’’ ChathamHouse,Europe China Research and Advice Network, 2012, 11, http://www.chathamhouse.org/publications/papers/view/182630.

21. Ibid., 72.22. Ibid., 71.23. Thilo Hanemann and Daniel Rosen, ‘‘China Invests in Europe:

Patterns, Impacts and Policy Implications,’’ Rhodium Group,2012, 3, http://rhg.com/events/china-invests-in-europe-patterns-impacts-and-policy-issues.

24. Wagner, ‘‘Capitalizing on the Euro Crisis: China Expands ItsInfluence in Europe.’’

25. Ibid. Also, Ash and Summers, ‘‘China, the EU and China’sTwelfth Five-Year Programme.’’

26. Ibid.27. Ibid.28. Hanemann and Rosen, ‘‘China Invests in Europe: Patterns,

Impacts and Policy Implications.’’29. Ibid., 7.30. Ibid., 5.31. Ibid., 6.32. Bonnie Glaser, ‘‘China’s Coercive Economic Diplomacy:

A New and Worrying Trend,’’ Center for Strategic and

International Studies, August 6, 2012, http://csis.org/publication/chinas-coercive-economic-diplomacy-new-and-worrying-trend.

33. Ibid.34. Hanemann and Rosen, ‘‘China Invests in Europe: Patterns,

Impacts and Policy Implications.’’35. ‘‘Wagner, Capitalizing on the Euro Crisis.’’36. Thomas Pickering and Einar Benediktsson, ‘‘China Knocks on

Iceland’s Door,’’ New York Times, March 12, 2013, http://www.nytimes.com/2013/03/13/opinion/china-knocks-on-icelands-door.html?_r=0.

37. Louise Armitstead, ‘‘China’s Wen Jiabao Demands Lift to EUArms Embargo,’’ Telegraph, September 20, 2012, http://www.telegraph.co.uk/finance/china-business/9556509/Chinas-Wen-Jiabao-demands-EU-lift-arms-embargo.html.

38. Liza Lin, ‘‘For VW, the Path to Global Dominance LeadsThrough China,’’ Bloomberg Businessweek, November 25,2012, http://www.businessweek.com/news/2012-11-25/for-vw-the-path-to-global-dominance-leads-through-china.

39. Hanemann and Rosen, ‘‘China Invest in Europe,’’ 59.40. Josef Joffe, ‘‘The Turn Away from Europe,’’ Atlantic Council,

November 5, 2012, http://www.acus.org/?q=natosource/turn-away-europe.

41. James Stavridis, Statement to the House Armed ServicesCommittee, USEUCOM, March 15, 2013, http://www.eucom.mil/mission/background/posture-statement.

42. Bates Gill and Andrew Small, ‘‘Untapped Trilateralism:Common Economic and Security Interests of the EuropeanUnion, the United States and China,’’ Chatham House,November 2012, 7.

43. International Monetary Fund, World Economic OutlookDatabase.

44. Gill and Small, ‘‘Untapped Trilateralism,’’ 12.45. Hans Binnedijk, ‘‘Rethinking U.S. Security Strategy,’’ New

York Times, March 24, 2013, http://www.nytimes.com/2013/03/25/opinion/global/rethinking-us-security-strategy.html.

46. Ibid.

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