9781250000088

Walter Laqueur was one of the few experts who predicted Europe's current financial and political crisis when he wrote The Last Days of Europe six years ago. Now this master historian takes readers inside the European crisis that he foresaw. Ravaged by the world economic meltdown, increasingly dependent on imported oil and gas, and lacking a common foreign policy, Europe is in dire straits. With the authority that comes from thirty years of experience as an expert on political affairs, the author predicts the future prospects of this troubled continent. Europe is the United States' closest ally, and its prosperity is vital to American's success and security. This is a mustread for anyone invested in our country's future.

WALTER LAQUEUR was the director of the Institute of Contemporary History in London and concurrently the chairman of the International Research Council of CSIS in Washington for 30 years. He was also a professor at Georgetown University and the author of more than twenty-five books. He has had articles published in The New York Times, The Washington Post, and countless other newspapers worldwide.

THE EUROPEAN DREAM: “THE DAY WILL COME…”

ON A DEPRESSING MORNING WITH the only news in the media about Ireland on the brink of the abyss, America diminished and paralyzed, Britain facing years of austerity, Greece in despair, Portugal beyond despair, Italy and Spain in grave danger, “chronically weak demand,” “debilitating cycle,” “collision course in Europe,” “killing the euro,” “pernicious consequences,” “towards the precipice,” perhaps the only comfort was offered by looking back six or seven years to the inspiring literature on the European dream, a postnationalist model of peace, prosperity, social justice, and ecological virtue. It is certainly encouraging to know that the homicide rate in Europe is one quarter that of the United States, that the literacy rate is higher as well as the life span and the amount of humanitarian aid dispensed. A revolution had taken place in Europe during the last sixty years, which most Americans had simply not noticed. It had achieved a new balance between individual property rights and the common good, between government regulation and the free market, between liberty and equality—which America with its naive belief in the all-curative power of the free market had never achieved. The excesses of consumer capitalism had been tempered. Then one would proceed to another book predicting in convincing detail that the future belonged to the European model, that it would be emulated all over the world, a shining beacon to all mankind. It had pioneered a new approach to a humanitarian foreign policy. At long last it had come to live in peace with itself and the rest of the world. Europe was healthy and sustainable; it was stress-free in contrast to feverish, unbalanced America. The future belonged to it.
There are still a few voices maintaining that Europe is a rising superpower in a bipolar world, and it is probably welcome to have such uplifting messages in a time of doom and gloom. Europe’s influence in the world (it is announced) is rising for a variety of reasons, among them the fact that the material and ideological conflicts between Europe and the other powers are decreasing. The European continent has been pacified. Elsewhere all major governments want to adapt European societal norms, moving toward democracy and cooperative international relations. Great are the powers of human self-deception. One apocryphal story stands out, that of the senior member of the British foreign office, who, complaining about the constant warnings of his junior colleagues on the danger of a war, declared that he had been in office for forty years from 1910 to 1950, and it had been a calm period but for two relatively short unpleasant interruptions—in 1914 and in 1939.
It is easy, far too easy, to ridicule now the illusions of yesteryear. The postwar generation of European elites aimed to create more-democratic societies. They wanted to reduce the extremes of wealth and poverty and provide essential social services in a way that prewar government had not. They wanted to do all this not just because they believed that it was morally right but because they saw social equity as a way to temper the anger and frustrations that had led to war. They had quite enough of unrest and war. For several decades, many European societies more or less achieved these aims, and they had every reason to be proud of this fact. Europe was quiet and civilized, no sounds of war, no threat of civil war either. The welfare-state concept was admirable. Its political economy was based on the assumption of permanent substantial economic growth, a Ponzi scheme of sorts but not an unreasonable or dishonorable one.
On what was Europe’s success based? Partly on recent painful historical experience, the horrors of two world wars, on the lessons of dictatorship, on fascism and communism that should never happen again. But above all it was based on a feeling of European identity and common values. What was this identity and how to define the common values? Or was it simply a community of material interests? It began after all as an iron, steel, and coal union. True, Jean Monnet, the father of the European Union, later said that he would put the emphasis on culture rather than the economy if he had to start all over again. But he did begin with the economy, and this approach was probably not without reason.
Among the European values and fundamental rights most often mentioned were the respect for human dignity, the rule of law, peace, respect for the environment, perhaps, above all, tolerance—the great diversity of European culture and the willingness to accept it. But were these values specifically European? Sixty-seven percent of Europeans thought they were specifically European in comparison with other continents. But such an answer was possibly misleading—more than half of Europeans doubted whether there was a shared European culture.
Why was European integration so difficult? It had to overcome what some called the artificial concept of nation statehood. But nation statehood had developed over the centuries; perhaps the world and Europe would have been better without it, but it was certainly not artificial. On the contrary, it could be argued that a community of communities was artificial. All investigations have shown that 90 percent of Europeans feel an attachment to the place and the country in which they were born, but much less so to a wider institution involving a different way of life and a different language. According to a 1996 Eurobarometer survey, only 51 percent of Europeans “felt European,” and this seems not to have increased since. Various attempts have been made since to strengthen the feeling of a common cultural heritage, including a European anthem and a European flag, but they have not had a great impact so far. Some common cultural events have been slightly more successful, including the Eurovision Song Contests (which also generated a considerable amount of ill will as the result of political maneuvering) or the Vienna New Year’s Day Johann Strauss concert, although this was also listened to by many millions in China and Japan.
Lessons of the past gradually fade away. True, the lesson that there should be no wars in Europe had sunk in, for the price that had been paid had been too high, and, in any case, Europe was now too weak to wage war. It had been at long last realized in this postheroic age that Europe, and a fortiori a shrinking Europe, had all the lebensraum it needed.
But these were negative lessons, teaching Europe what not to do. The feeling of European solidarity and of common values had not made great progress, after some uncertain beginnings—if it made progress at all. There was not even agreement about the borders of Europe. Was the United Kingdom closer to the United States or to Bulgaria or Turkey? Nor was it realistic to expect such progress—how could it compete with national feelings, which had developed over many centuries?
If common values were few or weak, what of common interests and common threats as a glue? These certainly existed, and not only in the economic field, but such a union resembled a financial company with limited responsibility; people might feel solidarity with their compatriots and be willing to make sacrifices for their homeland, but why do so for a community of economic interests? There were common political interests but also conflicts of interest; differences of opinion existed between countries and within countries.
When was it first realized that all was not well as far as the European Union was concerned? There had been a European crisis in the 1970s and the feeling that Europe was running out of steam after a promising beginning. There had been major crises elsewhere—in Russia in the 1990s and also in Asia (1997–98), Latin America (1999–2002), and even in the United States, and the countries affected had all recovered. As for global prospects in the 1980s there were wide divergences of opinion. The Cassandras (not many at the time) saw mostly doom and gloom, and it is of course true that sooner or later disasters do happen somewhere. But the majority view as expressed at the time in the leading works of political scientists on the rise and fall of great powers was that America was overextended and therefore bound to fall; stagnating Russia was also not in good shape, though hardly anyone foresaw how close the collapse was. China and India were more or less ignored, which is understandable because the great jump forward was just about to begin.
If there was mild optimism among the prophets, it concerned Japan and Europe. These powers were not overextended but made steady, gradual progress—in the case of Europe, accepting new members and moving toward a common currency. Some enthusiasts went further, describing how the European way was the best hope in an insecure world and how the European dream was quietly replacing the American dream, the term quietly being very often used in this context.
These were wrong assumptions and predictions, but they seemed not that far-fetched at the time. The Soviet Union disappeared, and the United States for a while became the only superpower, much to the chagrin of some who predicted further overextension and consequently even greater decline. Others took a more sanguine view. In the meantime, Europe was also expanding. By now, its population was greater than that of the United States and its GNP was also greater. But its growth was very much slowing down, and individual countries faced major problems. In 2005 the CIA published a report in which it predicted that, by 2020, the EU (and NATO) would disappear unless they carried out the most far-reaching reforms.
The reasons given were interesting but not wholly convincing: the European welfare state had become too expensive, virtually unaffordable, and made it impossible for Europe to compete on the world markets. This was quite correct—people lived longer, and medical treatment became more and more expensive. But the American authors of these reports seem to have ignored that the same applied to the United States, which had no welfare state (or merely a very limited one) but spent on health twice as much per capita as the Europeans. In the meantime some European countries, notably Sweden but also Germany, had proved that abuses of the welfare state could be put right and a great deal of money saved. Some of these cuts were painful, but many of the essentials of the welfare state were preserved.
In the 2005 forecast, yet another main reason was given for the coming collapse of the EU—the fact that Germany’s sluggish growth was negatively affecting the European economic performance, Germany being the strongest economic power. This was the perspective of 2005, but five years later the European situation looked very different indeed, with Germany as the undisputed leader and everybody compelled to dance to its tune. This showed again the pitfalls and difficulties of prediction. Some of the factors were a priori unpredictable, others were mainly psychological or had to do with the efficacy of government confronting a crisis. It was clear, for example, that if major banks engaged in foolish and imprudent activities, a price would have to be paid sooner or later. But it still depended on how the authorities and the public coped with such a situation. A collapse could be prevented, unless the foolishness and the damage had been monumental. Or there could be a panic, a mass run on the banks with equally foolish countermeasures taken, in which case the consequences could be far reaching and disastrous.
American global overextension with insufficient resources may indeed have been very damaging, and the European welfare state may have become a very heavy burden. But these were not the main factors that caused the great crisis of 2008. Mainly responsible were the enormous debts incurred by both America and Europe and the lack of financial oversight that led to the great instability on the markets caused by banks, governments, and individual debtors.
But the causes were not only economic in character—perhaps not even mainly so. As far as Europe is concerned it was the mistaken idea that there could be an economic union without a political union. There was little enthusiasm on the part of the richer European countries to help get the weaker economies out of trouble, especially if these weaker ones had behaved irresponsibly, or even fraudulently. Why should Germans retire at sixty-seven so that Greeks could retire at fifty-three? In other words, with all the talk about European identity and common values, there was little solidarity. Perhaps there could not be.
This should not have come as a great surprise. Looking at world history of the last hundred years, there are few cases of countries uniting and more of splitting. The Soviet Union split into a dozen constituent parts, Yugoslavia into nearly half a dozen, and Czechs and Slovaks reached the conclusion that they would be better off if they parted ways. Even in countries that had been united for a long time, separatist tendencies ran strong. When the United Nations was founded, it had 51 members; today there are 193.
The European dream had not come suddenly. In 1849 a peace congress took place in Paris. The opening address was given by Victor Hugo, in which he said,
A day will come when you France, you Russia, you Italy, you England, you Germany, you all nations of the continent without losing your distinct qualities and your glorious individuality will be merged closely within a superior unit and you will form the European Brotherhood.… A day will come when the bullets and the bombs will be replaced, by votes by the universal suffrage by the peoples, by the venerable arbitration of a great sovereign senate which will be to Europe what the parliament is to England, what this diet is to Germany what this legislative assembly is to France.
Victor Hugo went on for a long time. It was a stirring speech, but the day, alas, has not come yet.

Copyright © 2011 by Walter Laqueur

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THE EUROPEAN DREAM: “THE DAY WILL COME…”

ON A DEPRESSING MORNING WITH the only news in the media about Ireland on the brink of the abyss, America diminished and paralyzed, Britain facing years of austerity, Greece in despair, Portugal beyond despair, Italy and Spain in grave danger, “chronically weak demand,” “debilitating cycle,” “collision course in Europe,” “killing the euro,” “pernicious consequences,” “towards the precipice,” perhaps the only comfort was offered by looking back six or seven years to the inspiring literature on the European dream, a postnationalist model of peace, prosperity, social justice, and ecological virtue. It is certainly encouraging to know that the homicide rate in Europe is one quarter that of the United States, that the literacy rate is higher as well as the life span and the amount of humanitarian aid dispensed. A revolution had taken place in Europe during the last sixty years, which most Americans had simply not noticed. It had achieved a new balance between individual property rights and the common good, between government regulation and the free market, between liberty and equality—which America with its naive belief in the all-curative power of the free market had never achieved. The excesses of consumer capitalism had been tempered. Then one would proceed to another book predicting in convincing detail that the future belonged to the European model, that it would be emulated all over the world, a shining beacon to all mankind. It had pioneered a new approach to a humanitarian foreign policy. At long last it had come to live in peace with itself and the rest of the world. Europe was healthy and sustainable; it was stress-free in contrast to feverish, unbalanced America. The future belonged to it.
There are still a few voices maintaining that Europe is a rising superpower in a bipolar world, and it is probably welcome to have such uplifting messages in a time of doom and gloom. Europe’s influence in the world (it is announced) is rising for a variety of reasons, among them the fact that the material and ideological conflicts between Europe and the other powers are decreasing. The European continent has been pacified. Elsewhere all major governments want to adapt European societal norms, moving toward democracy and cooperative international relations. Great are the powers of human self-deception. One apocryphal story stands out, that of the senior member of the British foreign office, who, complaining about the constant warnings of his junior colleagues on the danger of a war, declared that he had been in office for forty years from 1910 to 1950, and it had been a calm period but for two relatively short unpleasant interruptions—in 1914 and in 1939.
It is easy, far too easy, to ridicule now the illusions of yesteryear. The postwar generation of European elites aimed to create more-democratic societies. They wanted to reduce the extremes of wealth and poverty and provide essential social services in a way that prewar government had not. They wanted to do all this not just because they believed that it was morally right but because they saw social equity as a way to temper the anger and frustrations that had led to war. They had quite enough of unrest and war. For several decades, many European societies more or less achieved these aims, and they had every reason to be proud of this fact. Europe was quiet and civilized, no sounds of war, no threat of civil war either. The welfare-state concept was admirable. Its political economy was based on the assumption of permanent substantial economic growth, a Ponzi scheme of sorts but not an unreasonable or dishonorable one.
On what was Europe’s success based? Partly on recent painful historical experience, the horrors of two world wars, on the lessons of dictatorship, on fascism and communism that should never happen again. But above all it was based on a feeling of European identity and common values. What was this identity and how to define the common values? Or was it simply a community of material interests? It began after all as an iron, steel, and coal union. True, Jean Monnet, the father of the European Union, later said that he would put the emphasis on culture rather than the economy if he had to start all over again. But he did begin with the economy, and this approach was probably not without reason.
Among the European values and fundamental rights most often mentioned were the respect for human dignity, the rule of law, peace, respect for the environment, perhaps, above all, tolerance—the great diversity of European culture and the willingness to accept it. But were these values specifically European? Sixty-seven percent of Europeans thought they were specifically European in comparison with other continents. But such an answer was possibly misleading—more than half of Europeans doubted whether there was a shared European culture.
Why was European integration so difficult? It had to overcome what some called the artificial concept of nation statehood. But nation statehood had developed over the centuries; perhaps the world and Europe would have been better without it, but it was certainly not artificial. On the contrary, it could be argued that a community of communities was artificial. All investigations have shown that 90 percent of Europeans feel an attachment to the place and the country in which they were born, but much less so to a wider institution involving a different way of life and a different language. According to a 1996 Eurobarometer survey, only 51 percent of Europeans “felt European,” and this seems not to have increased since. Various attempts have been made since to strengthen the feeling of a common cultural heritage, including a European anthem and a European flag, but they have not had a great impact so far. Some common cultural events have been slightly more successful, including the Eurovision Song Contests (which also generated a considerable amount of ill will as the result of political maneuvering) or the Vienna New Year’s Day Johann Strauss concert, although this was also listened to by many millions in China and Japan.
Lessons of the past gradually fade away. True, the lesson that there should be no wars in Europe had sunk in, for the price that had been paid had been too high, and, in any case, Europe was now too weak to wage war. It had been at long last realized in this postheroic age that Europe, and a fortiori a shrinking Europe, had all the lebensraum it needed.
But these were negative lessons, teaching Europe what not to do. The feeling of European solidarity and of common values had not made great progress, after some uncertain beginnings—if it made progress at all. There was not even agreement about the borders of Europe. Was the United Kingdom closer to the United States or to Bulgaria or Turkey? Nor was it realistic to expect such progress—how could it compete with national feelings, which had developed over many centuries?
If common values were few or weak, what of common interests and common threats as a glue? These certainly existed, and not only in the economic field, but such a union resembled a financial company with limited responsibility; people might feel solidarity with their compatriots and be willing to make sacrifices for their homeland, but why do so for a community of economic interests? There were common political interests but also conflicts of interest; differences of opinion existed between countries and within countries.
When was it first realized that all was not well as far as the European Union was concerned? There had been a European crisis in the 1970s and the feeling that Europe was running out of steam after a promising beginning. There had been major crises elsewhere—in Russia in the 1990s and also in Asia (1997–98), Latin America (1999–2002), and even in the United States, and the countries affected had all recovered. As for global prospects in the 1980s there were wide divergences of opinion. The Cassandras (not many at the time) saw mostly doom and gloom, and it is of course true that sooner or later disasters do happen somewhere. But the majority view as expressed at the time in the leading works of political scientists on the rise and fall of great powers was that America was overextended and therefore bound to fall; stagnating Russia was also not in good shape, though hardly anyone foresaw how close the collapse was. China and India were more or less ignored, which is understandable because the great jump forward was just about to begin.
If there was mild optimism among the prophets, it concerned Japan and Europe. These powers were not overextended but made steady, gradual progress—in the case of Europe, accepting new members and moving toward a common currency. Some enthusiasts went further, describing how the European way was the best hope in an insecure world and how the European dream was quietly replacing the American dream, the termquietlybeing very often used in this context.
These were wrong assumptions and predictions, but they seemed not that far-fetched at the time. The Soviet Union disappeared, and the United States for a while became the only superpower, much to the chagrin of some who predicted further overextension and consequently even greater decline. Others took a more sanguine view. In the meantime, Europe was also expanding. By now, its population was greater than that of the United States and its GNP was also greater. But its growth was very much slowing down, and individual countries faced major problems. In 2005 the CIA published a report in which it predicted that, by 2020, the EU (and NATO) would disappear unless they carried out the most far-reaching reforms.
The reasons given were interesting but not wholly convincing: the European welfare state had become too expensive, virtually unaffordable, and made it impossible for Europe to compete on the world markets. This was quite correct—people lived longer, and medical treatment became more and more expensive. But the American authors of these reports seem to have ignored that the same applied to the United States, which had no welfare state (or merely a very limited one) but spent on health twice as much per capita as the Europeans. In the meantime some European countries, notably Sweden but also Germany, had proved that abuses of the welfare state could be put right and a great deal of money saved. Some of these cuts were painful, but many of the essentials of the welfare state were preserved.
In the 2005 forecast, yet another main reason was given for the coming collapse of the EU—the fact that Germany’s sluggish growth was negatively affecting the European economic performance, Germany being the strongest economic power. This was the perspective of 2005, but five years later the European situation looked very different indeed, with Germany as the undisputed leader and everybody compelled to dance to its tune. This showed again the pitfalls and difficulties of prediction. Some of the factors were a priori unpredictable, others were mainly psychological or had to do with the efficacy of government confronting a crisis. It was clear, for example, that if major banks engaged in foolish and imprudent activities, a price would have to be paid sooner or later. But it still depended on how the authorities and the public coped with such a situation. A collapse could be prevented, unless the foolishness and the damage had been monumental. Or there could be a panic, a mass run on the banks with equally foolish countermeasures taken, in which case the consequences could be far reaching and disastrous.
American global overextension with insufficient resources may indeed have been very damaging, and the European welfare state may have become a very heavy burden. But these were not the main factors that caused the great crisis of 2008. Mainly responsible were the enormous debts incurred by both America and Europe and the lack of financial oversight that led to the great instability on the markets caused by banks, governments, and individual debtors.
But the causes were not only economic in character—perhaps not even mainly so. As far as Europe is concerned it was the mistaken idea that there could be an economic union without a political union. There was little enthusiasm on the part of the richer European countries to help get the weaker economies out of trouble, especially if these weaker ones had behaved irresponsibly, or even fraudulently. Why should Germans retire at sixty-seven so that Greeks could retire at fifty-three? In other words, with all the talk about European identity and common values, there was little solidarity. Perhaps there could not be.
This should not have come as a great surprise. Looking at world history of the last hundred years, there are few cases of countries uniting and more of splitting. The Soviet Union split into a dozen constituent parts, Yugoslavia into nearly half a dozen, and Czechs and Slovaks reached the conclusion that they would be better off if they parted ways. Even in countries that had been united for a long time, separatist tendencies ran strong. When the United Nations was founded, it had 51 members; today there are 193.
The European dream had not come suddenly. In 1849 a peace congress took place in Paris. The opening address was given by Victor Hugo, in which he said,
A day will come when you France, you Russia, you Italy, you England, you Germany, you all nations of the continent without losing your distinct qualities and your glorious individuality will be merged closely within a superior unit and you will form the European Brotherhood.… A day will come when the bullets and the bombs will be replaced, by votes by the universal suffrage by the peoples, by the venerable arbitration of a great sovereign senate which will be to Europe what the parliament is to England, what this diet is to Germany what this legislative assembly is to France.
Victor Hugo went on for a long time. It was a stirring speech, but the day, alas, has not come yet.

Copyright © 2011 by Walter Laqueur

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After the Fall The End of the European Dream and the Decline of a Continent

After the Fall The End of the European Dream and the Decline of a Continent

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