Europe’s Perfect Storm

Abstract

The financial crisis should force us into re-thinking the very meaning of power in the modern interdependent world. While in the last two decades European policy makers were focused on the notion of “soft power” — the power to inspire others and become a model for them, the crisis forces Europe to pay attention to two important new aspects. First, it seems now that some of the key features of the European model that we tend to view as universal — postsovereign, secular, de-militarized — are more a European exception. In a situation of economic decline Europe’s role in the world will depend not only on its values, but also on its hard power. And secondly, the comparison between the way the markets reacted to the debt crisis of the US and the debt crisis in some EU member states makes us believe that in the globalized interdependent world power is not simply the capacity to inspire and lead by example, but also the capacity to spill your problems onto others. While many security experts are over-optimistic that the crisis and the new decline in defense funding will almost automatically lead to more sharing and will open chances for a more effective CSDP, our analysis points towards the opposite trend. In our analysis if there is a lack of brave political leadership, Europe risks ending up with lower defense budgets, nationalization of the foreign and defense policies as a result of electoral pressures and the marginalization of the EU as a global power.