Powerful European Union changes balance of power

Thursday, January 21, 1999

Powerful European Union changes balance of power

THREAT: Euro creates potential for foreign dominance, control of
world market; U.S. loses out

European Monetary Union (EMU) is no longer a dream – it is now a
frightening reality. The myopic and friendly indifference shown
toward the Euro (the European Economic Union’s new currency) on
this side of the Atlantic belies the potential dangers that await
the world in the next millennium.

The European Union (EU), forever a glorious notion among
self-righteous economists and political scientists, has already
taken shape, and for us it is not pretty. If history is any
indication, the future is quite dependent on the condition of the
realm once known as Christendom.

Divided and broken, Europe was no threat to its neighbors.
United, Europe would be the most powerful social juggernaut on the
planet. Such a statement is academic to most of the world’s
inhabitants, but to the citizens of Europe’s chief competition, it
is an omen of their own destruction. Our economy and military are
designed around our supremacy. If this is superceded, hard times
lie ahead.

The purpose of my discussion is not to incite pandemonium.
Conversely, it is to stir suspicion and vigilance in a place that
claims no use for it.

Because of the events of the past 50 years, Americans have come
to see diplomacy as superfluous. From 1948 to 1989, Americans saw
the earth as a giant chessboard. We moved our white pieces
audaciously in the face of aggression – the Soviets. When checkmate
was declared, suddenly the State Department had to acknowledge a
change. We reprimanded our former henchmen like Saddam Hussein and
participated in peacekeeping missions. All in all, things appeared
well in hand.

In truth, American foreign policy has ignored the single most
crucial trend of the ’90s. It began with the fallout of Cold War.
Germany, partitioned by Soviet and American occupation for
forty-five years, clamored to reunite. When this was completed, the
Germans proclaimed it a success. Not long after, the west of
Europe, looking to sever the East from Russian domination forever,
circulated a small article called the Maastricht Treaty. The goal
was to create a continent-sized free trade zone. Nation after
nation in Europe signed, until the wily Danish refused to join. The
EU was born, but some countries stood outside the circle.

Europe, though, had great motivation to unite; consider what
they would gain from each other and the United States. Some
countries, like France and Italy, had a highly industrialized
society, but suffered from a weak currency fluctuating against the
American dollar and Japanese yen. Others, like the Netherlands and
Switzerland, could not produce on the levels of their neighbors.
Still others, namely Germany and the United Kingdom, had strong
currencies but always suffered when converting orders and resources
among other Europeans nations due to the dynamic exchange markets.
Then, one found the Eastern bloc barely adjusting to democracy, let
alone a gross domestic product.

Enter the "Eurodollar." Entering the world market like Jesus in
Jerusalem, the "Euro" received a treatment of savior only by its
apostles.

There will not be an immediate revolt against the powers that be
(the United States). Instead, the coin shall serve as an
ideological rallying point for all those oppressed in this world,
with the promise of another chance to compete with America. Just as
one fine resurrection initiated the sequence that toppled the Roman
Empire, so too the Euro’s power may lie in symbolic terms alone.
For Americans, sitting in casual disinterest like Pontius Pilate
could spell disaster.

The most direct evidence of an impending crisis originates from
Europe itself. Mixed feelings have split the continent. Among them,
the British retain heavy levels of skepticism. In a recent essay,
Martin Wolf commented, "The goal has never been strictly economic.
It has always been to secure an irrevocable political integration
of Europe’s states and peoples."

There is another concern that arose. Currently, the EU is an
undemocratic alliance of nations ruled by reputedly benevolent
dictators: the Commission, the Court of Justice and the European
Central Bank. Wolf then made a second point, "European democracy
cannot long be secured by a structure that is itself undemocratic."
He is loathe to claim whether the EU will succeed in its goal.
Effectively, its end is what Victor Hugo envisioned a century ago:
The United States of Europe.

So far, Americans have watched in tacit support – we are all
used to Europe being in a state of constant turmoil. Indeed, after
the second World War, policies were proactive toward preserving
peace. We could no longer act as if European conflicts were
innocuous to the United States. The EMU appears as closure; no
nation-state wants to subdue another.

Now they each voluntarily join forces on the eve of the next
millennium. Few historical events have been more poetic.

Consider: the new Europe is a military and economic threat.

Soldier-for-soldier, she has raised the best armies in history.
We tend to be patriots in America and extol our father’s war
wounds. Forget not the English Empire, Napoleon’s skill and the
Germans’ close defeat in the second World War.

The United States avoided the first two and was not the
principal victor of WWII in the Western Theater – the USSR was.
Technology is also on their side: the EU has to its credit such
prosaic weapons as the machine gun, tank and radar. Even today,
several have nuclear capability. United, our prior friends have
little need for NATO and the United Nations.

From the vantage point of economics, the EU will be the largest
free-trade zone in the world. As political science department chair
Ron Rogowski states: " … It will increase the efficiency of
European production and retailing … It will shift European
capital formation … toward equities markets and venture
capitalist." So the problem becomes one of protectionism.

While some Americans think this attitude is the most beneficial
to us, that is a fallacy. We need free trade to export the goods
that constitute the high value of American labor, such as
semi-conductors. Should the Europeans enter a gated economy, we
will suffer. Our adventures with Japan provide evidence.

So much for America the Proud leading the free world into the
future. I believe we will become the Mike Tyson of nations, having
once been so great and full of promise; nearly invincible. Then, in
a moment of confusion, we fall.

Overconfidence was the enemy. We spend the rest of our existence
trying to recapture lost glory.

Instead, we collapse in transit.

Oh sure, it is all speculation. It is just a coin. Such talk may
be premature. History is unpredictable to the very last.
Nevertheless, if the past and the trends of the present are
indicative at all, we have much to fear about the Euro. It’s just a
coin, you tell yourself. What damage can it do?

I suppose, after all, the Constitution is only a wrinkled piece
of paper.

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