Euro Summit: Chinese Help and Italian Trouble

The Economist just published this post on the element of this week's eurozone summit that would involve Chinese cash as a part of the currency zone's recapitalization plan. Ever instructive, the article lays out the China factor in some of the magazine's trademark economics-in-layman's-terms. I didn't know, for example, that the EU is China's biggest trading partner. Given all the hub-bub stateside, wouldn't most Americans assume that position was enjoyed (or maligned) by the United States? 

Yet the piece's author makes an effort to signal that the appeal for Chinese cash is neither revolutionary nor a particularly important change in the status quo. He takes a longer-term view on the EU-Chinese relationship, which of course bears direct influence on the American role between the two. 

"Grand political bargains between China and Europe—money in return for more representation at the IMF, or market-economy status—seem wildly improbable. These prizes will eventually come anyway; and weak though parts of Europe are, the EU cannot be seen to trade them too nakedly. Bargaining of this sort would also require both parties to change their positions markedly. China is keen not to be seen as a source of “dumb money”, but requiring big political concessions in return for cash is a pretty clear signal that this is not a commercially attractive investment. As for the euro zone, it can hardly claim that senior Spanish and Italian debt is now safe for institutional investors if it has to horse-trade too hard to get China on board."

And further along the pessimism spectrum is the Wall Street Journal, which, true to form, has expressed typical euro-skepticism on the summit's results and bemoaned the plan's lack of detail and the risks that remain for U.S. companies and stakeholders. Though the European Financial Stability Facility will "backstop" troubled eurozone countries against default, the paper says, this week's decisions fall short of the muscular moves called for by experts and do relatively little to stem fears of a backslide toward recession in Europe and worldwide. 

Both articles signal the lingering dangers of the tenuous Italian situation, where fractious politics in Silvio Berlusconi's government has dimmed hopes for any kind of meaningful action against the euro's woes. Italy is heavily in debt and, as the third-largest economy on the euro, its future determines that of a host of other dependent nations both in and outside the monetary bloc.

Courtesy of the Wall Street Journal and ICAP

Though the chart refers to Italy only, its title -- "Brief Relief" -- sounds just as appropriate for the whole of the eurozone for the many observers that continue to be concerned about the currency's immediate and middle-term prospects.

The EU's "Grand Area"

Earlier this year the British geostrategist James Rogers introduced this map of the European Union's current sphere of influence on European Geostrategy (part of Ideas on Europe). He calls it  the EU's "grand area." (See his full report from the Egmont Institute here.)

The zone covers a sort of C-shaped expanse that curves from Greenland and the North Pole, spreads over the European continent, North Africa and the Caucuses and then over the Indian Ocean, ultimately including Southeast Asian states like Singapore and Indonesia.

Rogers' depiction offers a reading of the eurozone's influence that is equal parts impressive and troubling. 

Impressive, in that the EU still leverages power over a huge swath over its home continent and former colonies. It includes the power centers of Russia and Central Asia, as well as those currently engulfed in popular unrest in Africa and the Middle East. Despite the grumblings of economists and euroskeptics, the EU still exerts massive influence on a huge slice of global territory. 

Troubling, however, in that those powers outside the "grand area" rank among those poised to dominate global affairs in the near and further future. The United States is conspicuously absent from the chart, as is for that matter the whole of the Western hemisphere. Many of the countries steadily gaining rank in tomorrow's multipolar power scheme -- including Brazil, India and China -- also fall outside the EU's influence zone. Even many of sub-Saharan Africa's former colonies align more to non-European powers, such as regional players like South Africa, than to their old patriarchs. 

There is much to hope for in the global power the EU says it wants to be. But, given that a good chunk of factors are missing from the EU's strategic equation, there's just as much to trigger doubts.  

...

Also see Rogers' illustration of current and future strategic recommendations for the EU, its neighborhood and those outside both.

EEAS Org Chart

Thanks to the Migrants at Sea blog for this organizational chart of the European External Action Service (EEAS). 

 

EurAmerican has published regularly about the EU's fledgling diplomatic corps, notably its relations with China, last year's disappointing Christmas summit with the US and this op-ed from Washington's The Hill newspaper, focused on the EEAS' presence in the American capital. 

"Foreign Policy? What Foreign Policy?" Recession-Era U.S. Voting

Andrew Kohut, President of the Pew Research Center, had this to say on US foreign-policy introspection in a recent article in The National Interest: 

"It is hard to recall a time when foreign policy issues played so diminished a role in the American public's thinking. Midterm election exit polls found only 8 percent of voters saying that a foreign policy issue was a voting consideration for them, and more generally, national polls show just 11 percent citing a foreign policy issue as the most important problem facing the nation. This is the lowest registration of international concerns since immediately before the 9/11 attacks."

 He goes on:

"Terrorism, the most immediate threat to [the United States], is a big issue now lacking either prominence in the public’s mind or a heated debate among policymakers. Americans have expressed a steady state of concern about terrorism since the 9/11 attacks, but the polling suggests that most have become somewhat inured to the possibility of another attack. For example, there is no indication this year of widespread anxiety in the wake of reports that terrorists attempted to place package bombs on flights destined for North America. Most Americans (59 percent) say they are worried about an imminent terrorist attack in the United States, but the level of concern today is about what it was in July 2007, and has remained relatively steady since 2003."

Kohut concludes with some interesting thoughts on America's worries in the Asian sphere, specifically China and the Korean peninsula:

"As with terrorism, the public has deep concerns about America's place in the world, but these worries do not evoke a strong policy debate. Yes a growing plurality thinks the U.S. now plays a less important role on the world stage, and majorities recognize China's growing power and worry about it. But for now at least, there is little edge to American attitudes as a consequence. Few regard China as an enemy (17 percent) or a partner (25 percent). As has been the case for more than a decade, China is seen as neither friend not foe by most Americans (52 percent). In fact, more Americans now hold a favorable view of China than did so in 2007 and 2008.

"Neither the recent North Korean bombardment of South Korea as it stands, nor foiled terrorist attack in Portland Oregon seems likely to rouse the American public. If history is any judge, it will take a foreign policy crisis of a major order, to awaken public opinion on international affairs. And when Americans stir, it is hard to predict the new direction of their thinking. What is likely however is that a change in direction of public opinion will be relatively short lived. That has certainly been the case so far in post–Cold War America."

Kohut's last paragraph is his most poignant, and one that identifies a structural American gene within the national political DNA. This level of isolationism would strike European publics as downright otherworldly. Europe is small compared to the U.S., and its foreign policy thoughts are often foremost in mind given that they are always closer to home. The United States has the singular peculiarity of being separated from both allies and enemies by an ocean on each side. So when other matters become pressing, in this case the national economic crisis, unemployment and widespread disillusionment with Obama's platform of hope and change, U.S. citizens traditionally put foreign policy thoughts on a very distant back burner.

Paradoxically, the U.S. seems to be ignoring the very wars it launches, and Europe is just as (if not more) preoccupied with world affairs in which the United States is at work. 

This cockamamie balance of today's Atlantic ring countries results in the world's progress toward multipolarization, a status much distrusted by many of the classical powers in the West. 

And yet some see beyond this, toward a future power balance in which the West will dull its appetite for world predominance with a healthy slice of humble pie. Just last week Hubert Vedrine, the former French foreign affairs minister, hit the radiowaves asserting that the transatlantic community was guilty of "Western arrogance" and that its member nations are "no longer the masters of the world." The recent economic tremors certainly don't help matters, where in Europe the Euro currency seems ready to crumble. The United States are faring no better, with the latest studies putting the jobless rate at a disastrous 9.8%.

Of course, the obvious insinuation of Kohut's piece is that Transatlantics, while struggling to steady a rocking economic boat, shouldn't take their eye off of the horizon. Prolongued economic travails will only increase the likelihood that one or several Western states drops the ball in a fateful moment of  security absent-mindedness. 

Should this risky position continue, Kohut's forebodings of a "foreign policy crisis of a major order" -- we're all probably thinking September 11th -- may come to pass. As for predicting the new direction in Americans' thinking should another disaster happen, well, the last lurch in U.S. opinion led to the Iraq War. Yes it was strongly resisted, both in the U.S. and abroad, but it happened anyway. 

American voters and the greater West risk more than they know while spending so much time navel-gazing over their domestic problems. They should also keep a watch on the dangers creeping just beyond its borders, and hone their global affairs literacy to know how best to act should action become necessary.

Europe Under China: The EU's U.N. Tug-of-War

NYT/IHT journalist Judy Dempsey serves up some interesting perspective on Germany and Portugal's recent assession to nonpermanent seats to the UN Security Council. She uses China as an axis of comparison with western powers' UN moves, catering to the center of focus for the American majority of her piece's readers. 

By default, her article relegates Europe to the same observer status Germany and Portugal have just won. 

The following excerpts bring the China element to the fore:

"Europe’s decline is partly linked to China’s growing influence as an economic power, donor and lender. From Belarus to Iran, across Africa and Latin America, China is lending money, forging trade deals and building roads, airports and schools while tapping the natural resources of these countries.

And there are no strings attached. “China sets no conditions, unlike the E.U., which often sets them in an inconsistent way” [quoted from source]. Indeed, China’s way of doing things is seen as a direct challenge to Europe’s dominance in development aid and trade agreements."

And:

"... With the radical shifts in global influence led by China, Europe’s influence is waning, and fast.

The E.U.’s hopes of supporting human rights and democracy around the world are at risk of being defeated by changes in the global balance of power,” said Anthony Dworkin, international law expert at the European Council on Foreign Relations. Nowhere is this more obvious than at the United Nations, where the Union has suffered embarrassing defeats.

Last month, it failed to win expanded rights to the General Assembly, where it has observer status. A new status would have allowed Brussels the right to make proposals, circulate documents and address the Assembly.

To the dismay of  Catherine Ashton, the Union’s high representative for foreign affairs and security policy [as implemented by the EEAS], some of Europe’s closest allies — Australia, Canada and New Zealand — abstained. Diplomats blamed the Union’s lack of strategy and consultation.

“The E.U.’s shambolic defeat was more than a humiliation,” said Paul Luif, Europe expert at the Austrian Institute for International Affairs in Vienna. “It showed the growing lack of support for an E.U. that seems more and more ineffective at the U.N.”

The article's title is "For Europe, a Challenge to Make Its Voice Resonate." Sounds more than a bit like "Europeans Woo U.S., Promising Relevance," also from the New York Times. One of its most prominent columnists, Roger Cohen, has similarly declared that "Europe is history," a "strategic backwater."

If what is arguably America's most Europhile newspaper sees grim days ahead for Europe, it should be equally gloomy -- and disconcerting -- to ponder the EU's eclipse within the UN Security Council specifically.