Europe's fading global footprint a major concern

European Union (EU) officials predictably dismissed the news as a temporary reaction to their continent’s sovereign debt crisis. But the reality is far grimmer, for the fact is that the euro’s challenge to the international predominance of the US dollar has now evaporated. And so has Europe’s reputation. The days when the EU presented itself as an economic example to be copied and a political model to be envied are gone.

It is now difficult to recall the cockiness EU diplomats displayed as they strutted the global stage, especially since the end of the Cold War. The whole European political model – generous welfare systems, democratic decision-making, closer regional integration leading to rising economic prosperity and the idea of a currency union as a stabilising factor – was touted as the continent’s gift to humanity.

European politicians eventually learnt to take account of the sensitivities of others, and usually prefaced their remarks by the disclaimer that they did not seek to impose their model on other nations. Nevertheless, their triumphalism continued unabated.

Want to promote Japanese-Chinese historic reconciliation? Germany and France, EU diplomats claimed, have been there and done that. Interested in avoiding clashes in the South China Sea? Just copy Europe’s model of making borders irrelevant, or of treating seas as fishery management issues. And, if you fret about global poverty, then you’d be advised to follow Europe’s lead in democracy and good governance.

The constant message was to present Europe as a “post-modern” entity perfectly attuned to the globalised world of tomorrow, a project which for the moment is sadly reserved for only some fortunate “white” nations but which, one day, will be embraced by the world.

Some of this, of course, was a myth: the European integration project was imposed from above by politicians who believed their people were too stupid to understand what is good for them. 

Nevertheless, it would be churlish to deny Europe’s accomplishments. The continent that unleashed two world wars banished state-sponsored violence from its soil. It has also banished acute poverty not only by spending vast amounts of money on the less fortunate east of the continent, but also by opening up its labour market to unrestricted migration from all East European nations.

Had the US, which now likes to criticise Europe for its failings, done the same with Mexico, the Western hemisphere’s political situation would have looked very different. Europe’s attraction to others around the world is, therefore, quite real.

Many strategic experts still believe Europe’s current financial crisis is just an aberration that will soon pass. Although Europeans infuriated the world with their never-ending series of last-minute summits and phone calls, leaders and finance ministers have held the bloc together in the face of growing strains between states, a rising political backlash and market alarm. No government has defaulted on its debts. Europe ended up doing the right thing, albeit only after trying everything else. So, given a bit of luck and a bit of economic growth, Europe could return to its traditional role on the world stage.

Sadly, however, the chances of this happening remain slim. To start with, Europe’s problem is not temporary but endemic: its economic model is no longer sustainable, and the painful readjustment process will take at least a decade. The current crisis is, therefore, not an exception but the new European norm. And it will have profound consequences, by diminishing Europe’s global footprint.

Evidence for this is everywhere. There is no common European position on China. There is no common European interpretation about the significance of the US “pivot” to Asia. Many of the smaller EU countries have already closed scores of overseas embassies: their foreign ministries now do little more than follow the world from the newspapers. Meanwhile, most European leaders nowadays talk about where their next “tranche” of bailout cash may come from. Global problems are left to lower-level officials who can handle them but cannot make serious decisions.

Overseas aid – hitherto a source of pride and influence for Europe – is also shrinking, with the notable exception of Britain, where the government has decided to maintain aid expenditure not because it believes in it, but largely in order to dispel domestic accusations that it is heartless.

To make matters worse, the EU’s foreign policy is suffering a double dip: the loss of relative influence compared with other powers, supplemented now with loss of foreign policy resources.

As a result, Europe’s famed “carrot-and-stick” approach to global partners no longer makes sense: the carrot – in the shape of Europe’s stagnant economy – is no longer enticing for other countries to accept, and the stick – EU sanctions against those it does not like – is no longer credible.

But the real reason why Europe’s decline will prove irreversible is the catastrophic loss of credibility in the EU project. What is the point of preaching global good governance when the EU is unable to persuade Greece, one of its members, to collect domestic taxes? How can Europe argue the virtues of economic efficiency when France – the second-biggest economy in the euro zone – has failed to balance its budget even once in almost half a century? And how can the EU continue to push for democracy when it proposes to take decision-making powers for national budgets away from elected politicians, placing them in the hands of bureaucrats in Brussels?

The “do as I say, not as I do” syndrome has often been a EU speciality, but the gap between claims and reality is now simply too big to bridge. Global opinion polls conducted by the BBC reveal a collapse in Europe’s international reputation: less than half of the respondents last year had a positive image of the EU, the lowest such figure in decades. And ordinary Europeans are voting with their feet: the biggest inflow of immigrants into Brazil, for instance, now comes from Portugal, the old colonial power.

But on the whole, Europe’s fading footprint is not good news for global stability. For a continent that still stands for the world’s biggest single trading bloc has the potential to drag other economies down with it, or unleash a variety of nasty currency and trade wars if it feels marginalised or no longer has a stake in the global economy.

So, paradoxically, the main burden may now fall on other governments to reassure Europe that, although it can never return to its former glory, it will still have its due place in a global system it invented and shaped for centuries. Even if this means forgetting the interminable and often humiliating preaching sessions which Europe administered to others.