Ever since World War II, Americans have correctly favored greater European unity. The Common Market spurred economic recovery and helped subdue the hatreds of two world wars. But the latest exercise in unity-embodied in the 1991 Maastricht Treaty-no longer deserves our admiration or support. It aims to create a single European currency by 1999 and to remake the European Community (EC) into something of a superstate. These foolish ambitions are bad for Europe, bad for the United States and bad for the world. They inhibit Europe from playing a constructive role in international affairs.
Everyone knows the basic problems of the post-cold-war era. The first is to help Eastern Europe and the former Soviet Union establish prosperous and democratic societies. The second is to nurture cooperative mechanisms that enable countries to maintain peace, healthy world trade and a cleaner environment. And the third is to foster strong global economic growth. On every count, Europe has been unhelpful.
It has been unimaginative and stingy in dealing with the former Soviet Union and Eastern Europe. It has been totally ineffectual in Yugoslavia. Its heavy farm subsidies threaten the global trading order: precisely the type of cooperative framework that’s now needed. As for the economy, Europe’s slump is self-inflicted and is hurting the rest of the world. The slowdown resulted from poor economic policies-rigid European exchange rates and high interest rates-adopted to cope with German reunification.
Europe aspires to join the United States as a superpower. The trouble is, Europe provides no practical or moral leadership. Building a more grandiose Europe serves as an all-purpose excuse to shirk global responsibilities. Europe’s message to everyone else is: be selfish like us.
Consider the current trade dispute. In 1962 the EC eliminated its tariff on soybeans. As soybean imports rose, the EC sought to stem the tide by massively subsidizing its own farmers to grow competing oilseeds: sunflower seeds and rapeseed. Europe’s oilseed production jump from 1.5 million metric tons in 1976 to 11.7 million in 1991. Meanwhile, its imports of oilseeds (mainly from the United States) dropped from 7.6 million tons to 6.3 million tons over the same period. In effect, the EC’s subsidies revoked the 1962 tariff concession. That violates the rules of the General Agreement on Tariffs and Trade (GATT).
In 1989 we complained to GATT. The GATT twice ruled in our favor. The Europeans refused to remedy their violation. Only after long negotiations did we retaliate: 200 percent tariffs to be imposed on $300 million worth of European food imports (mainly wine) in December.
Global leadership requires the capacity to identify larger international interests-consistent, to be sure, with a nation’s own interests-and pursue them, even at some immediate domestic political cost. This has been the hallmark of postwar U.S. leadership. We helped Europe and Japan rebuild after World War II, kept a strong military and maintained relatively open trade policies. It is precisely this capacity that Europe lacks.
On trade, perhaps the worst calamity -a breakdown of GATT-will be avoided. By threatening Europe with real penalties, the tough U.S. retaliation may prompt a settlement of the soybean dispute and the broader GATT talks. Even if this occurs, though, Europe seems fated to remain self-absorbed by the impractical and irrelevant goals of the Maastricht Treaty.
Take a common European currency, which would replace national ones, like the French franc. In the United States, a single currency works because, among other reasons, people migrate from a region of economic weakness to one of strength. Europe, divided by language and culture, lacks our flexibility. It’s hard to create an economic policy that suits all countries. The bad experience after German reunification confirms that. Europe needs separate currencies so that exchange rates can occasionally be adjusted to compensate for differences among nations.
Even if a common currency could work, it is irrelevant to Europe’s immediate needs. If Eastern Europe and the former Soviet Union slide into chaos, it won’t matter whether or not Western Europe has a common currency. The economic and social effects of this anarchy-unwanted immigration, perhaps more strife as in Yugoslavia-will be overwhelming. But Western Europe focuses on Maastricht instead of the more critical problems in the East. Europe’s leaders seem determined to waste much political energy in the futile pursuit of an illusion.
Europe cannot be made into a nation: it is a permanent cluster of nationalities. The unrealistic effort to do so is increasingly unpopular. The Danes rejected Maastricht, the French approved it by 2 percentage points. People fear being submerged by a faceless EC bureaucracy. To overcome hostility, Europe’s leaders pander to local interests. They are insensitive to outsiders, including us. Farm policy is one area where we’ve suffered; Airbus-Europe’s subsidized commercial jet maker-is another.
What Europe should do, as columnist William Pfaff writes in the International Herald Tribune, is follow its “past model of progress through pragmatic economic integration.” Specifically, it should bring Eastern countries into its market as quickly as possible.
The Persian Gulf crisis showed that Europe needs us. But we also need Europe as a superpower. All nations are looking inward, perhaps (as after World War I) dangerously so. Americans won’t make the sacrifices for global leadership unless other rich nations do likewise. Unfortunately, the Europeans won’t play. They merely want to advance their own agenda. Their isolationism feeds ours. Down that path lies a world without superpowers.
