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04 UK - US Special relationship:
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05 UK - EU Relations
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Who can we count on to stand by us: Europe or America?

By Simon Heffer 20/12/2006

Why, I wonder, does Tony Blair go on? I have always believed, more than many of his critics do, that he has an ethic of public service, but even that must be stretched by what is happening to him now. The print of the policemen's size 11s has barely faded from the Downing Street carpet. If press speculation is to be believed, some of the Prime Minister's best friends could be behind bars by next Christmas. He knows Gordon Brown will, barring some quite remarkable sequence of events, succeed him in office. The game is up. There is no more he can usefully do. It is, surely, time to call it a day.

These arguments are all, I know, based on the personal strains, disappointments and humiliations that Mr Blair must be feeling in an unpleasant twilight to a career he hoped would be built on moral uplift. But there are, of course, wider reasons. His continuation in office does the country no good. There is paralysis in Whitehall. Ministers look over their shoulders, wondering — or, in many cases, fearing — what life under the nouveau regime will mean for them. The rhetoric that spews out of the Labour press machine is (like the Chancellor's recent Pre-Budget Report) all old announcements and old initiatives, served up yet again. This is bad enough on the domestic front: internationally, it is a disaster.

Take, for example, the report published yesterday by the foreign affairs think-tank Chatham House. It suggested that the Prime Minister had no influence over George W. Bush, that our country's global influence had faltered as a result and that we had better build stronger ties with Europe. As part of this last suggestion, the Government is being urged to "re-think" our position on the euro and on the Schengen agreement, which allows passport-free travel over certain European borders. In a sinister phrase, the report says that a "rebalancing" of our foreign policy between Europe and America is necessary: hello Europe, bye-bye what remains of the special relationship.

So much of this short report is claptrap, and so inimical to the country's economic and security interests, that one might have thought at first sight it would give the Prime Minister cause to feel relieved. That, though, will have been before he heard Margaret Beckett, our Foreign Secretary, trying to rubbish it on the Today programme yesterday morning. This is the season of goodwill, and this column has been graphically rude about Mrs Beckett before, so I shall spare you much of the detail. Suffice it to say that by the end of her interview, Mrs Beckett had (by a toxic combination of bluster, inaccuracy, incompetence, petulance and quite possibly downright dishonesty) created the impression that the Chatham House report was a work of genius, its conclusions so self-evidently wise, that only a blithering idiot would attempt to dispute it, or them.

I occasionally, in those quiet after-dinner moments, ruminate on whether Mrs Beckett is the worst foreign secretary in modern British history. John Major might have run her close, but he only lasted in the job for three months. George Brown was at least intentionally amusing (as well as, a lot of the time, unintentionally so). At least Selwyn Lloyd tried. No: Mrs Beckett is in a class of her own. She combines a complete failure to grasp her brief — and, it seems, a profound lack of interest in it — with a humourless truculence that is at the same time pointless and embarrassing. She thinks she knows all the tricks of the game when it comes to avoiding giving any sort of answer to a serious and important question. However, they are tricks of obfuscation that worked when she was in the third division, but which simply confirm she is way out of her depth in the first.

Mr Blair's departure from Downing Street will at least — unless Mr Brown is certifiable — mean we get a new foreign secretary. But will it — should it — mean, as Chatham House hopes, that we get a new foreign policy? Undeniably, some of the points made in the report are true. Mr Blair has been taken for a ride by President Bush, but that is not the same as saying that it was wrong for us to participate with America in the Iraq war. Our participation should have been contingent on a strong input from our Prime Minister and Foreign Secretary, and it should have been up for review at all times. We could have demanded these conditions from the Americans. The political importance to them of our participation in Iraq meant our conditions would have had to be respected. But Mr Blair — whether because he was starstruck, careless, complacent or just too busy — chose not to.

Moreover, saying America has taken us for a ride is not the same as saying we must chuck in our lot with the Europeans and, as the strong pro-euro tone of the Chatham House report would suggest, accept our inevitable role as a subject region of a federated superstate. It is the pro-euro line, at a time when even the French prime minister is saying he wishes he could have the franc back, that most marks out the unreality of this report. But then, in this climate of casual anti-Americanism — as unpleasant in its way as the casual anti-semitism so popular in this country until the newsreel cameras went into Auschwitz — any absurd alternative to our established strategic plan must seem attractive.

Only the truly obtuse could ever imagine that the European Union could act as a reliable defensive coalition against any of this country's, or the West's, likely enemies. That is why we were in such a difficult position in the spring of 2003. Having relied on America for decades, until the end of the Soviet Union, to help protect us against the possibility of nuclear annihilation, were we then supposed to turn round and tell America to go it alone? And do we really think it would benefit the long-term interests of this country for us to turn round and make a similar suggestion to our most reliable ally now?

Mr Bush certainly is not the brightest light on the Christmas tree, and in an ideal world we would not be dealing with him. But we are in the world we are in, and he is the (twice) democratically elected leader of our most important friend on earth: a friend that, for the moment, is the world's only superpower.

In exactly two years and one month, he will leave office. Washington has learnt more from the debacles of the past four years than it finds it politically feasible to admit, but we can be sure that, whether a Republican or a Democrat succeeds Mr Bush, he will not pursue international relations in anything like the same tone as this Administration has, or be happy with a servile approach from us to the Anglo-American relationship — which remains, as Dame Pauline Neville-Jones, former head of the Joint Intelligence Committee, pointed out this week, the most important we have.

Foreign policy is the most significant challenge that will face the next prime minister. He needs a new, serious, highly intelligent foreign secretary. He needs to put our relationship with America urgently on a new footing — but one that will reinforce the alliance between us and not undermine it. Above all, he needs to recognise the true long-term strategic threats to our country — most immediately from Islamic terrorism, but in the longer term from an increasingly rogue state in Russia, with its energy supplies and nuclear warheads — and ask what possible use Europe is likely to be in defeating either.

Uncle Sam may have shown he can be a bit of a stupid bastard but, in the end, he's still our bastard.

http://www.martinfrost.ws/htmlfiles/dec2006/us_europe.html

Britain's special relationship 'just a myth'

Toby Harnden 01/12/2006

A senior American official has spoken of "the myth of the special relationship" between the United States and Britain, arguing that Tony Blair got "nothing, no payback" for supporting President George W Bush in Iraq.

Kendall Myers, a leading State Department adviser, suggested that Mr Blair should have been ditched by Labour but the party had lacked the "courage or audacity" to remove him.

David Cameron, the Conservative leader, was "shrewd, astute" to have distanced himself from America.

In candid comments that will embarrass Mr Bush and Mr Blair, the veteran official said America "ignored" Britain, and he urged Britain to decouple itself from the US.

He asserted that the "special relationship", a term coined by Sir Winston Churchill in 1946, gave Britain little or nothing.

"It has been, from the very beginning, very one-sided. There never really has been a special relationship, or at least not one we've noticed."

The result of the Iraq war would be that any future British premier would be much less cosy with Washington than Mr Blair had been, and the Prime Minister's much vaunted view that Britain was "a transatlantic bridge" was now redundant.

Mr Myers said Donald Rumsfeld's comment before the invasion of Iraq in March 2003 that America could go it alone without Britain had been a clarifying moment.

"That was the giveaway. I felt a little ashamed and a certain sadness that we had treated him [Mr Blair] like that. And yet, here it was, there was nothing – no payback, no sense of a reciprocity of the relationship."

During the Vietnam War, Harold Wilson had been "a great deal more clever than Tony Blair". Mr Wilson "managed to fool us on Vietnam" and "succeeded by sounding good but doing nothing".

Mr Blair had done the opposite. "Blair got it the other way round and joined in this Iraq adventure."

Mr Myers conceded that the Prime Minister had faced a difficult decision in 2003. "The way that Iraq developed, it would have been extremely difficult for Tony Blair to have done a Harold Wilson."

The Bush administration took little account of what Britain said, Mr Myers said. "We typically ignore them and take no notice. We say, 'There are the Brits coming to tell us how to run our empire. Let's park them'. It is a sad business and I don't think it does them justice."

Mr Blair, he said, was more articulate than Mr Bush, but the Prime Minister's ignorance of the British experience in Mesopotamia had led him to make a catastrophic error in backing the Iraq invasion. "Unfortunately, Tony Blair's background was as an actor and not an historian. If only he'd read a book on the 1920s he might have hesitated."

Iraq became a nation state in 1920 after being carved out by the French and British from the remains of the Ottoman empire. It turned out to be a bloody affair that Churchill referred to as the "Mesopotamian entanglement".

In the Middle East, America had "not only failed to do what we wanted in Iraq but we have greatly strained our relationships with others".

Iraq was the single issue that now dominated transatlantic affairs, but Mr Blair had been unable to get anything in return from Mr Bush. "I can't think of anything he got on the asset side of the ledger."

Mr Myers, a senior analyst with the State Department's Bureau of Analysis and Research, was speaking in a lecture in Washington at the School of Advanced International Studies, part of Johns Hopkins University.

The public lecture was entitled: "How special is the United States-United Kingdom relationship after Iraq?"

Mr Myers said Mr Blair's reputation was in tatters over Iraq. "One of the most brilliant prime ministerships of modern times was brought a cropper by the Iraq war."

Mr Cameron had been cunning to say in September that Britain must be "not slavish in how we approach the special relationship".

A State Department spokesman said: "The views expressed by Mr Myers in no way represent the views of the United States government."

http://www.martinfrost.ws/htmlfiles/dec2006/special_relationship.html

British Conservatives Must Defend the U.S.-U.K. Special Relationship

Nile Gardiner Aug 30, 2006


The Anglo-American special relationship today faces one of its greatest challenges ever in rising British opposition to the United Kingdom’s close ties to the United States. The resurgent Conservative Party under David Cameron must do more to counter this change in public attitudes. British Conservatives should embrace their Party’s traditional pro-Atlanticist agenda and resist the temptation to adopt an anti-American foreign policy.

The realistic alternative—spurning Washington in favor of closer ties to Brussels—threatens the effectiveness and leadership of both the United States and Great Britain on the world stage, as well as the progress of the war on terrorism.

Changing Attitudes
The recent YouGov/Spectator poll of British attitudes toward U.S.-U.K. leadership of the war on terrorism should serve as an important wake-up call for policymakers in both Washington and London.

While an encouraging 73 percent of respondents agreed that “we are in a world war against Islamic terrorists who threaten our way of life,” nearly 80 percent dismissed the idea that Britain and America were “winning the war against terror.”

Only 14 percent of those surveyed supported the view that Britain should “pursue a foreign policy agenda closer to that of the United States;” 45 percent believed that “Britain should position her foreign policy closer to that of the European Union.”

The poll reflects a sea change in attitudes among a British public that is traditionally pro-Atlanticist and skeptical of European integration. In part, the survey is a reaction against an unpopular prime minister, Tony Blair, who is closely aligned with Washington and whose international standing eclipses his domestic image. Blair’s approval rating remains at less than 30 percent. The public’s changing attitudes are also representative of a broader rejection of U.S. leadership on the world stage and rising anti-Americanism on both the left and right of the political spectrum.

Several other recent polls have produced negative findings with respect to British perceptions of U.S. foreign policy and Downing Street’s support for it. A July ICM poll for The Guardian found that 63 percent of Britons thought the U.K. was “too close to the USA.”

In a June YouGov/Daily Telegraph poll, 77 percent of those polled disagreed with the view that the United States was “a beacon of hope for the world,” and 58 percent supported the description of America as “an imperial power.”

Fully 67 percent expressed “little or very little confidence” in “the ability of the United States to deal wisely with present world problems,” and 65 percent supported the view that U.S. policies made the world “a somewhat or much worse place to live in.”

Worryingly, anti-American views are now more prevalent in the U.K. than in some continental European countries with a far deeper tradition of public skepticism toward the U.S. In the latest Financial Times/Harris poll of opinion in five of the EU’s largest member states, a staggering 36 percent of Britons surveyed described the United States as “the greatest threat to global security.” (Just 19 percent of British respondents cited Iran as the world’s greatest threat).

In contrast, 28 percent of Frenchmen, 21 percent of Italians, and 24 percent of Germans shared this view. Only in Spain was the negative perception of U.S. foreign policy greater than in Britain.

The Threat to the Special Relationship
If the British public continues to move further away from the United States and slides closer to the European Union on major international issues, the long-term future of the special relationship will be in jeopardy. Britain is at a turning point in its history, faced with a choice between further political, legal, military and economic integration with the EU and a deepening of its alliance with the United States and other English-speaking allies such as Australia. As Tony Blair discovered with the Iraq war, the two competing visions are largely incompatible.

From the U.S. point of view, it would be a geo-strategic disaster if Britain leans toward Brussels rather than Washington. The most prominent casualty of a fully developed EU Common Foreign and Security Policy (CFSP) would be the Anglo–U.S. special relationship, forcibly con­signed to the scrap heap of history. America’s closest ally would be unable to operate an inde­pendent foreign policy and stand alongside the United States where and when it chooses to do so. The consequences for America would be hugely damaging.

For Britain, there is much to lose from a weakening of the Anglo-American alliance: the further loss of national sovereignty, the diminution of British global power and influence, the loosening of defence and intelligence ties, and a weakening of the close-knit financial, trade, and investment relationship.

For both U.S. and U.K. policymakers, the defense of the special relationship should be a priority. On the U.S. side, the Bush Administration should step up public diplomacy in the U.K. Little has been done so far to effectively project and communicate America’s foreign policy message to British and European audiences. In London, the Blair government must do more to explain how the alliance with America enhances Britain’s national security rather than undermines it, and why the special relationship is a two-way street that brings Britain major benefits. At the same time, the British government should not undermine the alliance with America by supporting further political or defense integration in Europe.

The Resurgence of the Conservative Party
In the U.K., the Conservative Party, the home of Winston Churchill and Margaret Thatcher, should play a key role in cementing the transatlantic relationship. Traditional support for the Anglo-American alliance has been a hallmark of the Party’s foreign policy for over half a century. British and American conservatives are committed to many of the same values and ideals on the world stage: the defense of national sovereignty, the projection of military power to confront tyranny and threats to international security, the advancement of free trade, and the protection of human rights. As Shadow Defence Secretary Liam Fox recently remarked in a speech in Washington, “Together, America and Britain have helped remake much of the world in the image of liberty and democracy.”

The Conservative Party has returned as a major force in British politics. The latest poll by ICM gives the Conservatives a nine-point advantage over the ruling Labour Party, the Tories’ biggest lead in 19 years. Out of power since Tony Blair swept into Downing Street in 1997, the Conservatives now are serious contenders for government when the next U.K. general election is held in either 2009 or 2010.

Blair’s demise coupled with the decline in the polls for the Labour Party offer the Conservatives their first opportunity in a decade to emerge as a force in international affairs. As the Conservatives move closer to Downing Street, there is growing interest among Washington policymakers in the Conservative Party’s foreign policy positions, in particular those concerning issues that have a direct bearing on the United States.

The positions of British Conservative leaders on the war on terrorism, Iraq, Iran, Lebanon, and North Korea, for example, now carry far more weight than they did a year or even six months ago. They can no longer be ignored or dismissed as the statements of an opposition party far removed from political power and are increasingly seen as the views of a potential government in waiting. As such, the positions of British shadow cabinet ministers on the major international issues of the day are rightly drawing the attention of the White House, National Security Council, Pentagon, and State Department.

For the first time in a decade, British Conservatives are in a position to have their voice heard and to make a real impact in Washington, especially in terms of U.S. policy toward the European Union. British conservatives can play an important role in helping shape U.S. thinking on the future of Europe, an issue of fundamental national importance to the United Kingdom and the United States. The message they must convey is that the increasing centralization of political power in Europe poses a fundamental threat to both the British and the U.S. national interests.

A Dazed and Confused Foreign Policy
To many policymakers in Washington, however, the Conservative Party’s current foreign policy is an enigma. The newly released party manifesto, “Built to Last,” makes no mention at all of the United States and fails to outline a coherent vision or strategy for fighting the global war against Islamic terrorism or confronting the growing threat posed by Iran and other rogue regimes. Nor does it address the future of Britain’s relationship with the European Union.

In its public statements, the Conservative Party’s leadership appears increasingly to be following the polls rather than leading public opinion, or mirroring the sort of fashionable anti-American rhetoric popular in the salons of Paris or Brussels. At times the foreign policy positions of the center-right Conservative Party resemble that of the left-wing Liberal Democrats. High-profile attacks by some Conservative MPs on the war in Iraq and America’s conduct of the war on terrorism are seen as deeply unhelpful across the Atlantic.

Condemnation by the Party’s leadership of Israeli military operations in Lebanon as “disproportionate” provoked a backlash not only among Conservative supporters in Britain, but also widespread unease in Washington, where it was viewed as a huge shift in policy as well as a sharp jab at U.S. support for Israel.

There are echoes of former Conservative leader Michael Howard’s highly confrontational and ultimately disastrous approach toward the U.S. administration that so badly damaged relations between conservatives across the Atlantic. The current thaw in relations, achieved by the highly successful visit to Washington in February of three leading shadow cabinet ministers (Liam Fox, George Osborne, and William Hague), may be edged aside by another transatlantic ‘cold war’ that would be in the interests of neither the Conservative Party nor the Bush Administration.

By playing to increasing anti-U.S. sentiment in the U.K., the Conservative Party risks burning bridges and alienating friends and allies, a risky short-sighted strategy that will yield little long-term gain. A poisoned relationship between the new Conservative Party leadership and the Bush Administration would undermine the influence of British conservatives in Washington. If the public attacks on U.S. foreign policy become a longer-term trend, a Conservative government would find itself in an extremely difficult position dealing with a future Republican administration. Even a Democrat-run White House would balk at the kind of language being used to describe Israeli action against Hezbollah.

There is an immediate need for greater dialogue and exchange of ideas between British and American conservatives, as well as high-level contacts between shadow cabinet ministers and officials in the executive branch of the U.S. government. The common goal should be the advancement of the special relationship and U.S.-British interests on the world stage. There will undoubtedly be strong disagreements over policy issues, but these are better aired in frank, private meetings than sharply worded opinion pieces that can cause significant public damage.

Defending the Special Relationship
British conservatives should advance a strongly pro-Atlanticist agenda that emphasizes U.S.-British leadership on the world stage, Anglo-American cooperation in the war on terrorism, a firm determination to halt the development of a nuclear-armed Iran, support for global free trade, and concerted action to end the genocide in Sudan and human rights abuses in countries such as Burma and Zimbabwe. This should be a foreign policy based on the view that Britain, in alliance with America, is a major global player, with significant military, diplomatic, and economic clout that eclipses that of any other European country—in other words, a self-confident international power whose vision extends far beyond the narrow confines of the European Union.

Peter Cuthbertson assisted with research for this paper.
Dr. Gardiner is the Bernard and Barbara Lomas Fellow in the Margaret Thatcher Center for Freedom at The Heritage Foundation. http://www.humanevents.com

http://www.martinfrost.ws/htmlfiles/sept2006/special_relations.html

You don't have to love Europe.

But do you want to lead or be dragged along?

José Manuel Barroso October 18, 2006

No nation state can meet the challenges of climate change, mass migration, global competition and terrorism on its own

Europe's raison d'être was clear from the beginning. It was not the common market. It was not created by foreigners for the sole purpose of eroding the sovereignty of the UK, or any other country.

No. Its fundamental raison d'être was a noble one, and Robert Schuman, in his declaration of May 9 1950, made sure everyone knew it: "World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it."

Schuman said that pooling the production of coal and steel - the raw materials of war - under one authority, "will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible".

Today, the success of this strategy is self-evident. War between France and Germany has become unimaginable, and thanks to successive enlargements we have spread peace, stability and prosperity across the European continent. But 60 years of peace has meant that the image of Europe as a bastion against war is losing its resonance.

Europe's political landscape is today characterised by a tension between those who fear the future, who fear the world, and want protection from it, and those who reach out to it. Should we close or open our doors to what comes from outside? My answer is we must have a Europe which is open to the rest of the world.

But the EU needs a new core purpose. One which looks forward, recognises new realities, that draws inspiration from, but does not depend upon, the achievements of the past. Our purpose is staring us in the face. In 1950 the challenge was securing a lasting peace. Today it is climate change, growing competition from China and India. Mass migration. International terrorism. These challenges are shared by all Europeans, from London to Lisbon. They are challenges which no nation state can tackle successfully alone.

The fact is, the EU is a uniquely effective instrument for helping the UK and other European countries to develop solutions to these new, cross-border challenges. And surely this is the EU's raison d'être for the 21st century: to help Europeans prosper in a globalised world.

There are those who claim that in our interconnected age it is grassroots politics that matters, that globalisation has liberated the local and that the EU is rendered irrelevant in this globalised world. They are wrong. The opposite is true. Globalisation makes the case for the EU.

Size matters in the globalised world. The actors of globalisation, the US, China, India, dwarf any single member of the EU. But the EU has size; 500 million people, the biggest single market and the biggest aid donor in the world.

Yes, countries like the UK have special relationships with India or China, and it is to the EU's benefit that they do. One of the reasons that those countries want good relations with the UK is because it has influence in the EU.

Globalisation has reduced the ability of the nation state alone to provide solutions, while failing to provide a realistic alternative at the global level. Europe - with its shared values and diversity of expertise - fills that gap.

It is to the nation state that most Europeans feel greatest allegiance. But in an era when the challenges facing nation states are global, governments can best deliver for their citizens by leveraging our common strength as Europe.

Europe's agenda is not some alien construction; it is one which responds to the challenges being addressed by the UK and by others in Europe. If the UK wants to tackle climate change, fight poverty in Africa, deliver greater security, if it wants a more open, competitive environment, then the UK needs the EU. But there is another important truth: the EU needs the UK.

Britain is a lead player in Europe. On climate change, for example, the UK's support was vital for putting the emissions trading scheme in place. On security and defence, the UK was last year the biggest contributor of troops to European security and defence policy operations. The next head of the EU's military staff will be British. On Africa, Prime Minister Blair has shown a clear commitment, making it a priority of the British presidency of the EU and the G8.

Finally, on open economies and competitiveness, the UK was a driving force for the creation of the single market and has been a leader in pushing for open trade. The world has changed. Europe has changed too. And the UK now finds itself at the centre of efforts to build a successful, open and global Europe.

And yet it sometimes seems reluctant to take pride in its contribution. The UK will always have influence in Europe. Its size, its economic power and its international networks will ensure that. So the question is: does the UK want to shape a positive agenda which reflects its own agenda, or be dragged along as a reluctant partner? Margaret Thatcher accepted, in the Single European Act, the need for effective institutions to drive an ambitious policy agenda. What was true then remains true now. Europe cannot fight climate change, poverty, threats to security, without effective institutions. If you want these ends, you must have the means to deliver them.

Becoming an effective, global Europe requires improving Europe's capacity to act. That is why institutional reform is necessary. The constitution would have helped. But what Europe needs is a capacity to act.

There is a lot we can do. I do not subscribe to the view that Europe is stuck. But the current set-up is less than optimal: the Nice treaty obliges us to revise the composition of the commission as soon as there are 27 member states. We need reform to improve the efficiency of decision-making. As the number of member states rises, the time it takes to reach a decision increases. This has to change. There is no point reaching the right policies on globalisation if they arrive five years too late.

The distance is growing between Europe and its citizens. Injecting greater accountability into Europe's institutions will help to close that gap. That means developing a more political way of building Europe, rather than a diplomatic, bureaucratic or technocratic one.

There can be no global Europe without greater external coherence. There is no single number for the US to call. The EU is not a federal state. But a European foreign minister, simultaneously responsible to the member states and a vice-president of the commission, would help achieve that coherence.

We also need reform to enable enlargement to continue. Europe's new vocation is to be open, global and engaged. If there was ever a case to argue that the agendas of the UK and the EU were in conflict that is now absurd. And let us also get off the old sovereignty debate.

I like Harold Macmillan's answer to that. He said, in 1962: "Accession ... would not involve a one-sided surrender of sovereignty on our part but a pooling of sovereignty by all concerned ... In renouncing some of our sovereignty we would receive in return a share of the sovereignty renounced by other members."

No one is forced to love Europe.

What I ask is that the UK demands more from Europe, and keeps giving more in return. It is no longer a question of whether people are for or against. The question is: do you want to make the European Union work?
·Jose Manuel Barroso is president of the European Commission;
this is an edited extract from the Hugo Young Lecture, given in London on Monday.

http://www.martinfrost.ws/htmlfiles/oct2006/dragged_along.html

The Decline and Fall of Europe


Cartoons and riots made the headlines in Europe last week, but a far less fiery event, the publication of an academic study, might shed greater light on the future of the Continent.

The Organization for Economic Co-operation and Development, headquartered in Paris, released a report, ‘Going for Growth’, that details economic prospects in the industrial world. It is 160 pages long and written in bland, cautious, scholarly prose. But the conclusion is clear—Europe is in deep trouble. These days we all talk about the rise of Asia and the challenge to America, but it might well turn out that the most consequential trend of the next decade will be the economic decline of Europe.

It's often noted that the European Union has a combined gross domestic product that is approximately the same as that of the United States. But the EU has 170 million more people. Its per capita GDP is 25 percent lower than that of the U.S. and, most important, that gap has been widening for 15 years. If present trends continue, the chief economist at the OECD argues, in 20 years the average U.S. citizen will be twice as rich as the average Frenchman or German.(Britain is an exception on most of these measures, lying somewhere between Continental Europe and the U.S.)

People have argued that Europeans simply value leisure more and, as a result, are poorer but have a better quality of life. That's fine if you're taking a 10 percent pay cut and choosing to have longer lunches and vacations. But if you're only half as well off as the U.S., that will translate into poorer health care and education, diminished access to all kinds of goods and services, and a lower quality of life. Two Swedish researchers, Frederik Bergstrom and Robert Gidehag, note in a monograph published last year that "40 percent of Swedish households would rank as low-income households in the U.S." In many European countries, the percentage would be even greater.

In March 2000, the EU's heads of state agreed to make the EU "the most competitive and dynamic knowledge-driven economy by 2010."Today this looks like a joke. The OECD report goes through the status of reforms country by country, and all the major continental economies get a B-minus. Whenever some politician makes tiny, halting efforts at reform, strikes and protests paralyze the country. In recent months, reformers like Nicolas Sarkozy in France, Jose Manuel Barroso in Brussels and Angela Merkel in Germany have been backtracking on their proposals and instead mouthing pious rhetoric about the need to "manage" globalization. EU Trade Commissioner Peter Mandelson's efforts to liberalize trade have been consistently undercut. As a result of the EU's unwillingness to reduce its massive farm subsidies, the Doha trade-expansion round is dead.

Talk to top-level scientists and educators about the future of scientific research, and they will rarely even mention Europe. There are areas in which it is world-class, but they are fewer than they once were. In the biomedical sciences, for example, Europe is not on the map, and it might well be surpassed by much poorer Asian countries. The CEO of a large pharmaceutical company told me that in 10 years, the three most important countries for his industry would be the United States, China and India.

And I haven't even gotten to the demographics. In 25 years, the number of working-age Europeans will decline by 7 percent, while those over 65 will increase by 50 percent. One solution: let older people work. But Europe's employment rate for people over 60 is low: 7 percent in France and 12 percent in Germany (compared with 27 percent in the U.S.). Modest efforts to allow people to retire later have been met with the usual avalanche of protests. And while economists and the European Commission keep proposing that Europe take in more immigrants to expand its labour force, it won't. The cartoon controversy has powerfully highlighted the difficulties Europe is having with its existing immigrants.

What docs all this add up to? Less European influence in the world. Europe's position in institutions like the World Bank and the IMF relates to its share of world GDP. Its dwindling defence spending weakens its ability to be a military partner of the U.S., or to project military power abroad even for peacekeeping purposes. Its cramped, increasingly protectionist outlook will further sap its vitality.

The decline of Europe means a world with a greater diffusion of power and a lessened ability to create international norms and rules of the road. It also means that America's superpower status will linger. Think of the dollar. For years people have argued that it is due for a massive drop as countries around the world diversify their savings. But as people looked at the alternatives, they decided that the chief rivals, the euro and the yen, represented economies that were structurally weak. So they have reluctantly stuck with the dollar. It's a similar dynamic in other arenas. You can't beat something with nothing.
Fareed Zakaria: February 2006

http://www.martinfrost.ws/htmlfiles/Europe_decline.html