By Michael Gonzalez

The transatlantic alliance — the springboard of America’s global involvement, in Zbigniew Brzezinsky’s words — will change dramatically in the first decade of this century. Americans would be prudent to prepare for the possibility of estrangement in the relationship, stemming not just from differences in economic outlook between a given U.S. administration and the leading European governments of the day, but also from a secular desire by some in Europe to vie for global political leadership. It should hardly need mentioning that such an outcome would have adverse consequences for the way the United States projects its power throughout the globe; we would have to learn, for one thing, to do without our European partner.

But none of this needs to happen. The United States and Europe could develop an even deeper alliance as better-defined common interests draw us closer together — perhaps a happier result. In between these two outcomes falls a range of possibilities, largely unforeseeable in their particulars.

What can be foreseen — about the only certainty we have — is that the European Union will have played the key role in the result, whatever it is. If the United States wants to have influence over the direction the alliance ultimately takes, it cannot ignore the EU as a principal interlocutor.

Indeed, one thing that became clear during the first year of the new administration in Washington is that attempts to bypass the EU by President George W. Bush’s policy advisors — or by executives of private companies, for that matter — paid fewer dividends than at first thought. More often it would have been better to pave the way for initiatives by gaining allies who agreed with policy positions or investment decisions. This was the case in a variety of issues, from scrapping the Kyoto protocol on climate change to the failed GE/Honeywell merger the lost seat at the U.N. Human Rights Commission, and missile defense. To make this observation is hardly to call for a mushy “multilateralism.” GE and Honeywell could have flouted EU Commissioner Mario Monti’s decision and gone ahead with their merger, but decided to abide by it because the price — leaving Europe — was higher. In other words, this is the way the world works.

As far as the Bush administration is concerned, it was obvious even before the election that the Old Continent was not high on the agenda of its potential senior officials. National Security Advisor Condoleezza Rice gave every indication that she had a healthy respect for giants such as Russia and China — powers which, in her apposite words, “can ruin your whole day.” For Secretary of State Colin Powell, the accent from the start was on the Middle East, the region where he earned his spurs as the chairman of the Joint Chiefs of Staff during the Gulf War, and where the new administration was most in need of making a visible departure from the direction of the previous one. For Defense Secretary Donald Rumsfeld, the emphasis was on Asia and on space; in fact, he voiced a desire to withdraw troops from Europe. For Bush himself, Mexico and the rest of Latin America seemed to take first place; thus his bold call for a Western hemispheric trade bloc at Quebec and the exchange of visits with President Vicente Fox.

All these are areas worthy of attention. But the trouble with an insufficient focus on Europe is that it leaves the transatlantic relationship adrift, vulnerable to the vagaries of day-to-day events, to the ad-hoc management of disputes over trade, the environment, Airbus subsidies, and such. The only European vision would then come from the other side of Pennsylvania Avenue. And in Congress these days, most of the people thinking about the EU at all either are resolute about the fact that they don’t like what they see (the Republicans) or want to find support in Europe for opposition to Bush administration initiatives (the Democrats). The latter is perhaps unavoidable, given the nature of partisan opposition. But the former, the GOP’s euroskepticism, takes a number of forms, one of the more prevalent of which could do serious damage to American relations with Europe in general — bringing that specter of long-run disengagement to life.

For some members of the president’s party, the only truly trustworthy European country is America’s old ally, Britain. And the only action available is to help Britons in an ephemeral struggle with Brussels over sovereignty — to help them, in effect, disengage as much as possible from the EU.

Caution of course is required of those, like me, who propose to argue that the EU can be made to work for libertarian ends. Many who apparently think otherwise, influential senators such as Phil Gramm and Jesse Helms and members of their staffs, can hardly be challenged on the depth of their commitment to such conservative or libertarian ends as free markets, political liberties, and a limited public sector. Indeed, one can go further and say that the majority of American europhiles probably dream of one day importing the EU’s socialist-leaning pretensions. But on this issue, Helms and Gramm, and their friends in various think tanks in Washington, London, and elsewhere, are wrong, and perhaps calamitously so.

Especially because the EU has the potential to become a spoiler in the Atlantic relationship — to, let’s be frank, become the agent of those with designs to break up the alliance, force the United States to leave military bases in Europe, and diminish the American economic presence there — America the superpower needs to do everything it can to prevent a decoupling. It may find the EU an unlikely partner, but the United States needs regularly to remind Europeans of our common aspirations. This should not be too difficult. As President Bush’s trip to Europe in June made clear, the main differences do not separate one side of the Atlantic from the other, but two groups within all postindustrial, technologized societies: One trusts the state to provide answers to problems, the other one does not. This means that an administration such as Bush’s should forge links with those European governments that share its vision of freer economic competition, of the use of antitrust legislation to serve consumers rather than threatened competitors, and of a general rollback in the role of the state. This is the best way toward an EU the United States can live and prosper with.

In the first year of the Bush administration, these politicians are Italy’s Silvio Berlusconi and Spain’s Jose Maria Aznar (and not for nothing did Bush begin his European tour in Madrid). But Democrats in Congress who accept the market but are leery of too much Hayekian-style competition (true “New” Democrats) should also realize that they too have allies in Europe, most notably Britain’s Tony Blair and his intellectual Chancellor of the Exchequer Gordon Brown, and probably also Germany’s Gerhard Schröder. These men may harbor a desire to “manage” capitalism but are fascinated by its potential nonetheless, and they likewise do not want to see America and Europe decouple, realizing that both sides would be losers for it. None of the leftists in government in France today really identifies with anyone in America, but it is still an open question who will gain power next year in legislative and presidential elections.

Allies in national governments have the ability to change the EU, since they own it. The bureaucrats at the Brussels institutions, being more influenced by the French bureaucratic model, undoubtedly have the ability to turn the EU into a centralized monolith that Americans and Britons would despise. Many of them might also prefer to drive a transatlantic wedge. But the EU is not institutionally an enemy of the United States. It equally has the potential to disperse power away from national capitals and send it closer to the regions and, therefore, to the individual. This is exactly the type of evolution that would please Republicans, especially the former governor who often said during the campaign, “Texans can run Texas.”

But either way, to get results of this kind we need a more powerful Britain inside the EU, not one that has disengaged. Rather than “freeing” our ally Britain from the clutches of Brussels, we need Britain to play a strong role in the EU.

Tory euroskeptics

For George W. Bush, the danger is that Republicans risk allowing themselves to be unduly swayed by the euroskeptical wing of Britain’s Conservative Party. This is the European political party closest to the Republicans — it is the party of Margaret Thatcher, after all — and the most important plank in its last manifesto is to save the pound. At least one member of the last shadow Cabinet, and several of its front benchers, wanted to pull out of the EU altogether, or at least to “renegotiate” the relationship, by which they mean more or less casting the Continent adrift from Britain. These Tories are calling on Republicans to help them fight “Brussels” on grounds that appeal to the GOP soul — arguing that its institutions seek to weaken British sovereignty and its commitment to free markets. Though many are probably motivated by noble instincts — pro-American sympathies and/or a fear of seeing an erosion of the nation-state, which they see as the only political institution that can make democracy and civil liberties possible for citizens — they sometimes engage in rhetorical legerdemain: They point out to their American friends that the majority of Britons are ambivalent about the euro and about deeper European integration, but they leave out the inconvenient fact that an even larger majority of Britons tell pollsters that they do not want to leave the EU.

It was not surprising, then, to see Sen. Gramm go to London on July 4, 2000, to invite Britain to join NAFTA. The senator went at the invitation of one of the most redoubtable British europhobes, publisher Conrad Black. Black, who leads a vigorous campaign against Britain’s participation in Europe, claimed that he’d gotten a positive reaction from Bush to the idea of Britain in NAFTA. Even if this was just a misunderstanding, he seems to have persuaded others. Sens. Helms and Gordon Smith, writing in the Black-owned Daily Telegraph, warned earlier this year that the EU is anti-American.

A bit lost in all this, perhaps, is the discomfiting fact that it was the europhobes who led the Tory party to electoral ruin on June 7. There seems, in fact, to exist an inverse relationship between the impact that this wing of the Tories and their media partners have on Britons and that which they enjoy among congressional Republicans. Though it’s true that the fear of running afoul of Black-owned publications does make many pro-EU Tories mind what they say in public, overall, he seems to be losing the battle. After the electoral defeat, Tories who are more moderate on Europe showed signs of emancipation. William Hague, who made “the campaign to save the pound” the central point of the elections, quit the morning after the loss. Subsequently, two of the top three vote getters among MPs in the race for party leader were europhiles: former defense minister Michael Portillo and Kenneth Clarke, who has held numerous senior government posts. When they talk about “renegotiating” with Brussels, what they mean is using British influence within the EU to change the nature of the EU as a whole. This is something that Britons wholly support, that the United States ought to encourage, and which would ultimately benefit all Europeans.

An ally that grates

It is not difficult to see why the EU makes American policymakers, especially Republicans, uncomfortable. The first actual threat to U.S. defense that the new Bush administration faced as it came into office came after all not from an enemy, but from our European allies. Their insistence on building a rapid reaction force, which the French want to make independent of NATO, as well as their rejection of Bush’s missile defense plans, risks creating a split in the Alliance. I have already mentioned the EU Commission’s scrapping of the GE/Honeywell deal, a merger between two American companies. More generally, the EU all too often presents itself as an experiment in the “social market,” if not as an outright challenger to the United States. The euro, we have heard all too often since its inception, will one day rival the dollar as the world reserve currency, with adverse consequences for American borrowing rates. It was the EU — not its constituent members — that refused to buy U.S. beef and bananas. The man who carried the message was Leon Brittan, the EU commissioner, not Sir Leon, the former British official.

All this is true, but it ignores certain important points that Bush administration officials ought to consider as they fashion a European policy.

The first is the most obvious: The EU is not going to go away, and sudden American animosity against the experiment taking place in Europe will badly backfire in several ways. Those within the European Union who want a transatlantic divide would seize upon such opposition as evidence that the U.S. is not interested in a partnership between allies, and as further reason for erecting a superstate that can “stand up to the Americans.”

More important, the description of the European Union as a troublesome Leviathan-in-waiting purposefully ignores the fact that the EU has struck a blow for classical liberalism that no other existent organization can rival: 350 million people can now transport themselves, their capital, their goods, and their services unmolested across the borders of 15 nations. Protectionism may not have entirely disappeared among members, but it has been made very difficult. The euro itself represents a major step toward global exchange-rate stability. Already 12 different currencies have ceased floating against each other according to the whims of currency speculators or, worse, to those of panicking politicians trying to gain an illusory economic advantage over their neighbors through depreciation.

The europhobes’ rejection of the EU can, in fact, often (though not always) be best understood not as the reaction of free-marketers aghast at a social democratic Leviathan, but as the uneasiness European conservatives-cum-nationalists feel about classical liberalism. More than once I’ve noticed the whiff of something akin to nineteenth century German romanticism in the fulminations of euroskeptics against this institution for making borders and different exchanges disappear.

Following Tory anti-EU urgings would therefore make matters worse. Britain is our strongest ally in the EU, the one that most stands up for values that we hold dear. It is also the member state most likely to rally others to use EU institutions to push a free-market agenda. U.S. policymakers should therefore try to do all they can to raise Britain’s voice inside EU councils, not encourage its departure. A worthy goal for a free-market administration would be to effect a linkup with the euro and the yen that would allow investors and traders to plan ahead without the risk of currency instability rather than chasing some neomercantilist chimera by trying to retain the dollar’s status as sole world reserve currency (it will remain so as long as America is the world’s superpower, not the other way around). Likewise, the administration should not pursue a destructive policy of tit-for-tat retaliation against an EU that drags its feet on trade, but quietly work for a gradual elimination of tariffs between NAFTA and the EU in order to pave the way for a “Trans-Atlantic Single Market.” U.S. Trade Representative Robert Zoellick has already shown the way by getting rid of one of the stupidest irritants in the relationship, the battle over banana subsidies. Indeed, from the beginning of the administration, Zoellick has been the senior official who seems to have best understood the need to deal with the EU head-on.

The Bush administration could not have a more opportune moment to influence matters on all these fronts, as EU countries are now on the cusp of tremendous change. In less than a year, euro notes and coins will be introduced — in other words, what has until now been mostly a matter for central bankers and investment professionals will be part of the everyday life of over 300 million Europeans. The European Union will also soon be expanding to take in East European candidates, and the former Iron Curtain captives will bring with them a more skeptical view of the supposedly “benevolent” state, a view mainly missing in EU councils. More important, a struggle is being waged at the center of the EU itself — sometimes quietly, often publicly — between the forces of control and centralization on one hand and those of pluralism, devolution, and liberalization on the other. The decisions Europeans make about their currency, their armed forces, and their political institutions are important in their own right and by themselves will affect their relationship with the United States for years to come. But the outcome of the struggle for the heart of the EU will set the Union on a course not easily reversible for even longer. An Inter-Governmental Conference to be concluded by 2004 will define which competencies properly belong to the EU, which to the nation-state, which to the regions. No conference can impose changes that only take place organically, but calling an IGC shows that the question of regionalism is being debated. Berlusconi’s government is pro-devolution, copying the work that Spain has done and that Blair has begun with Scotland, Wales, and Northern Ireland.

A war child

It is perhaps worth remembering that men who share America’s libertarian instincts have been in charge of the EU before. Indeed, the Union had classical liberal beginnings, as even its biggest detractors readily admit. It was a post-World War II attempt at stopping government interference in the lives of Europeans. The machinery is still in place.

The past two centuries have belonged to the nation-state and the last century increasingly to its corollary, the welfare state. Napoleon’s armies provided the initial impetus for the creation of two large unified countries out of the scores of principalities, duchies, bishoprics, and republics that straddled the Continent between the Mediterranean and Scandinavia. The spread of the Industrial Revolution through Europe strengthened that process, both by making the case for economies of scale and by requiring government intervention to cope with the dislocations and turbulence of rapid industrialization. Later still, major wars had the same effect.

The last one caused such devastation that the survivors realized something radical had to be done. The EU’s founding fathers and early supporters, men like the Franco-Luxembourgeois Robert Schuman and the Rhinelander Konrad Adanauer, had witnessed the worst ravages of state power, and what they wanted most was to master it. Churchill, no socialist he, spoke of the need for “a kind of United States of Europe.” These statesmen sought a lasting reconciliation between Germany and France, yes, but they had other things in mind as well. As even the europhobic Belgian writer Paul Belien recognized in a Centre for the New Europe pamphlet:

The EEC of the Treaty of Rome was set up as an instrument for economic liberalization. The aim of transferring national sovereignty to the supranational level was to prevent the national levels from becoming too interventionist. The net result should be less government interference.

The U.S. actively supported all these goals. By 1954, the EU’s predecessor, the European Coal and Steel Community, had achieved nearly barrier-free trade in coal, steel, coke, and pig iron. Unsurprisingly, its six members discovered that trade in these commodities shot up.

But along came Charles De Gaulle, who did not share antisovereign dreams but who nonetheless saw the EU as a means to control Germany. Significantly, De Gaulle recognized the British threat early on, vetoing Britain’s entry into the Union expressly because of its “special relationship” with the United States. Britain joined finally in 1973, after the general had passed away, but little more than a decade later, in 1985, Jacques Delors was named president of the European Commission. Delors was far less truculent than De Gaulle, but he was an heir to two different European traditions that emphasize secrecy and “solidarity” with the less fortunate: Catholicism and socialism. When the sense of mission of the former is added to the latter, the result can suffocate industry.

More than any other senior EU official before him, Delors endeavored to suffuse the Union with the philosophy of the welfare state. It was he who introduced the “social” concept to the EU, by which is meant imposing on members a (very high) minimum level of welfare legislation. Since the EU was the tool through which competition was being introduced into François Mitterrand’s France, Delors decided he would apply jiujitsu and use the EU to spread French socialism. The idea may have been to protect workers from the competition brought in by internally open borders, but the results were clogged labor markets and double-digit unemployment. Not only did Delors set the EU on a different path from that which it had followed before, but his attempts to impose from Brussels unwanted social regulations on free-market, Thatcherite Britain fanned flames of europhobia there that still have not died. He did more than just poison the atmosphere with regard to Britain; he also began to strain ties with Reagan’s America.

To European socialists, an America that was setting an example by succeeding economically through free-market policies and winning the Cold War by increasing military spending rightly loomed as a threat to their existence. The ultimate collapse of the Soviet Union compounded the disaster by leaving America as the sole superpower, an “hyperpuissance,” in the words of French Foreign Minister Hubert Védrine. It needed to be countered, and the EU handily provided the tools for doing so, now that Delors had introduced the social straitjacket.

The ascendancy of centralizing forces within the EU would make Europeans more intractable U.S. allies, especially for center-right American governments interested in promoting free trade and the liberal system around the world. Dirigistes, from the level of the foreign ministry down to the shop-floor labor organizer, are resolutely anti-American and want nothing more than to thwart American aims.

Disappearing sovereignty

It is not difficult, therefore, to see why many Britons and Americans have become so concerned about the direction the EU has taken. For the past 15 years they have seen the growth of an organization that is increasingly doing the bidding of dirigistes in France, Italy, and Germany by forcing other reluctant nations to accept welfare policies — or as the Tories would put it, an unelected, Brussels-based bureaucracy that is sapping decision-making powers from a sovereign parliament.

For historical reasons, sovereignty has always seemed more important to Britons and Americans than to their European cousins. Our Declaration of Independence is a concise explanation to the rest of the world as to why the colonists sought to “assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitles them.” Britons, an island people, are no less enamored of their independence. The last foreign troops to enter the British Isles ready for action were the Dutch, in 1688, and they were invited in by a parliamentary faction. Before that, one would have to go back to 1066 and the Normans; no other people on the Continent can lay claim to such a long history of running their own affairs. It is these similarities that have convinced many Tories that Britain would be better off to throw its lot in with the United States and the North American Free Trade Agreement. On one side they see a Continental institution that increasingly wants to impose a code of welfare provisions — the truly Napoleonic Acquis Communautaire — that the majority of Britons reject, and on the other they have Americans, with whom they share ties of language, blood, and philosophy. It should not surprise that, on the other side of the Atlantic, they have found Republicans willing to lend a sympathetic ear.

British europhobes have a response to the argument that only London can really make sure that the EU struggle is won by pluralists: They say they could never get their views across in an EU they see as dominated by the “Franco-German Axis.” But while the imperative of Franco-German rapprochement after World War II did require Germany and France to close ranks during the early years of the EU, this is decreasingly the case. The relationship has been characterized by a notable absence of warmth in the post Kohl-Mitterrand era. Today’s three leaders — the cohabiting Chirac and Jospin and Chancellor Gerhard Schröder— plainly do not get on. Chirac is a Gaullist and therefore doesn’t see eye to eye with the two Socialists, while the doctrinaire Jospin can’t stomach the Clintonian absence of principle in his German counterpart. And Britain, despite all that the British europhobes say, does have a very significant, positive impact on the EU — one that is easily measurable. Its opposition to most forms of harmonization has been invaluable for the cause of liberality. It frustrated the imposition of an EU-wide withholding tax on savings, which was a sure bet until Chancellor Brown threatened to veto it at the EU summit in Lisbon. At the EU summit in Nice, Blair stood firm by blocking attempts to take the national veto away. It is of utmost important for states to keep the veto for all important items, as majorities can sometimes be found for the most economically irrational measures.

So it would be to Europe’s centralizers that an EU without Britain would be bequeathed, notwithstanding the governments of Berlusconi and Aznar. This would be a potentially disastrous outcome for America. Economically, we can ill afford to give up on attempts to improve our trade relationship with the rest of the EU, even if what we get in exchange is tariff-free trade with Britain. As one would expect, two-way trade with Britain is far smaller than trade with the EU. But there is also the damage one would see to the cross-investment America already enjoys with the rest of the Continent, of which Daimler-Chrysler is but the best known example. Progress on all these fronts would be severely set back if we “took” Britain out of the EU. Not only would the strongest advocate for our common values among the four largest EU members be gone, bad as that is in itself, but Britain’s departure would generate unprecedented resentment among the other EU member states. The likelihood that the Union would evolve over time into an entity inimical to U.S. (and British) interests would increase very significantly.

There will always be a strong temptation for a Republican administration to listen to the Tories, even when they’re in opposition. The Tory shadow defense minister, Iain Duncan Smith, got an audience with Defense Secretary Donald Rumsfeld before the holder of the actual post, Geoff Hoon, got through the door. But if the Tories don’t change under new management in the next few years, they are apt to distance themselves from Bush’s type of Republicanism more and more. Under William Hague, the Tories emphasized the aspects of conservatism — suspicion of anything that threatens the nation-state, fear of immigrants, etc. — that the inhabitant of the White House puts least emphasis on. And when it comes to privatization and rolling back government, the Tories and the White House are headed in separate directions.

Universal values

The trouble is, the United States from its very beginning as an independent nation has been based on universal values. This involves much more than just America’s history as a land of immigrants, but deals primarily with America’s founding principles (though the principles no doubt engendered the history that was to come). Philosophically, the American colonists could base their resolve to break free neither on racial grounds (they were separating from fellow Britons, after all) nor on an ancient, uncodified “constitution,” as British and French parliamentarians did, respectively, in 1688 and 1789. So they discovered the “inalienable rights” that man was born with and which applied to all, inside or outside the Volk. Europe’s blood-and-soil nationalism has rarely stained American history, so the debate gripping the Tories is less an issue with us.

The europhobes who would leave the EU to join NAFTA have, then, tragically misunderstood America as an idea. But, much worse, they have not grasped the exigencies of its status as a world power. Militarily, this would spell even worse disaster. Present French designs to make the European rapid reaction force independent of NATO would quickly come to fruition, shattering the Alliance. Europe — all of it — is the center of gravity of America’s global power projection. America can prepare to deal with potential hot-spots throughout the world only as long as its international political base, the Atlantic Alliance, holds.

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