Betrayal of Europe

As President Obama prepares to leave for his European trip--which will take him to the G20 summit in London, then to France, Czech Republic and finally to Turkey--divisions are already emerging between the European approach(es) and US approach to solving the economic quagmire. In an unusually blunt interview with the New York Times and the International Herald Tribune, German Chancellor Angela Merkel stressed that while Obama might enjoy popularity of a rock star all across Europe, the Germans oppose Obama's stimulus solutions. The normally reserved and superbly intelligent Merkel said in a moment of candor: "International policy is, for all the friendship and commonality, always also about representing the interests of one's own country."

What this statement exposes is not only Germany's disagreement with Washington's approach to the crisis, but it reveals the fragility of the very idea of Europe itself. The idea of the European Union emerged on the ashes of post World War II Europe when a few French and German intellectuals tapped into the legacy of European idealism, mixed with the German Catholic tradition of solidarity, to create a blueprint for an all European Union. The idea was to connect all the European countries, which had been sporadically each other's enemies for centuries, through a series of multilateral trade agreements. The core of the idea was the belief that if European countries became inextricably linked to each other through their economic interests, that a common European identity would emerge, which would eventually serve as an arch over all the particular national identities, which had been the cause of so much suffering on the continent. That is, the emergence of a pan-European identity has always been the driving force of the European Union.

Angela Merkel's statement, coupled with the recent policies (or lack thereof) of the European Union towards solving the crisis shows that 17 years after the European Union became a reality with the signing of the Maastricht treaty (1992), the idea of a pan-European identity and solidarity is being displaced by the return of the good ole' nation-state realpolitik rooted in national self-interests.

The European response(s) to the crisis have been very troubling. The big European countries have repeatedly refused to extend a hand to their poorer Eastern European neighbors whom they had just let join the EU. Despite the fact that most of the E.European economies, of countries like Hungary and Serbia, had come to the edge of the precipice because of high-interest loans from Western European banks, the Western members of the EU have refused to shore up International Monetary Fund's aid to Eastern Europe. Keeping in mind that Eastern European countries were sold the idea of the EU on the premise that after living under the tyranny of inefficient communism they would be enjoying a life-long prosperity under capitalism, this represents a serious betrayal of Western European promise to Eastern Europe. In fact, it represents a near-death blow to the very idea of Europe since it shows that European leaders do not think in terms of larger European interests, but rather national self-interests.

What is even more disturbing is that these policies are very self-destructive. For example, if Eastern European banks are not bailed out, then they will not be able to repay their loans to Western European banks, which in turn might bring some of these down because they are heavily leveraged in the E.European markets. With the fall of major Western European banks, the whole European banking system might be endangered.

Obama has to stress to Merkel and other Western Europeans that they have an obligation to help their poorer neighbors recover and to spend on their own recovery. Merkel's opposition to spending plans is reasonable given Germany's shrinking population and the fears of inflationary pressures on the Euro, but if Germany, France and Britain continue to act separately from the rest of Europe at a time of crisis, the end of the crisis might be followed by Eastern European countries deciding that joining the EU was not in their best interest. And I wouldn't blame them.