A weak EU is in America’s interest

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Despite having a number of reasons to want the EU to break up, Washington knows that a European meltdown could destabilise the United States. Therefore, keeping the Europeans in a state of long-term unease is acceptable to the United States, says Stratfor.

Stratfor is a Texas-based global intelligence company.

"The leaders of the G-20 met in Mexico on Monday. The purpose of the meeting was not altogether clear. The primary focus was on Europe and there was general agreement that the Europeans need to do something. What they should do was harder to say.

There seemed to be sentiment in favour of stimulating Europe's economy. This seemed a good idea, particularly for the non-Europeans who would profit from the stimulus without having to pay for it or live with its potential consequences.

Two countries with a vital interest in Europe's good health are China and Russia. Europe is China's largest customer, but if it slides into recession, Europeans will be buying fewer Chinese goods. At a time when China's economy is already under pressure, the country wants a healthy European appetite for its products.

That, of course, is an argument against stimulus that puts more money in the hands of consumers. Instead of buying European products and stimulating the economy, they might buy Chinese and other imports. That would make the stimulus a large economic transfer to the Chinese.

The Russians are also interested in a healthy Europe. The foundation of the Russian economy is raw materials, and Russia exports its key raw material – natural gas – to Europe. The Continent appears to be sliding into recession. If that slide continues, European industries will require less natural gas, which will significantly impact the Russian economy. 

But Russia has a deeper view of events in Europe. Russians remember the Europe that existed before war was officially abolished on the Continent. They remember when one of the consequences of European nationalism was the invasion of Russia.

Russians are not of the school that believes that this can never happen again – particularly since it happened more than once. They have a pessimistic view of history. They perceived Europe to be an ideal neighbour – a continent that is united economically, obsessed with prosperity and indifferent or hostile to defence expenditures. If the European Union crumbles, Russia cannot be certain of what will follow.

Certainly the Russians will reach out to the Germans, and the Germans might reciprocate. But a Europe divided once again into a crowded mass of nation-states pursuing their own interests – with Germany as Russia's primary ally – will cause anxiety. So the Russians have many reasons to want the Europeans to resolve their problems and return to a successful obsession with prosperity.

The American position is even more complex. Whether American leaders admitted or even confronted this, the United States was not happy with the emergence of a unified, transnational state with an economy larger than that of the United States – and eventually an equally powerful military as well. The latter will likely not happen at this point, so the fear American leaders never faced becomes irrelevant.

At the same time, the United States does not want a European meltdown; a financial crisis in Europe would significantly impact the United States. But there are certain advantages to be found in a global economic crisis before it becomes critical.

Large amounts of European money seeking safe haven are joining Chinese money that has long been flowing into American markets, buying stocks, bonds, real estate and anything else that is available. To some extent this has stabilised American financial markets. The money flowed in because – on a relative basis – the United States is safer than Europe or China at the moment.

Despite having a number of reasons to want the EU to break up, Washington does not want such a result because a European meltdown could destabilise the United States. Therefore, keeping the Europeans in a state of long-term unease is acceptable to the United States. It places the Chinese and the Russians in a more difficult position and generates inflows of money from frightened investors.

Of course, the truth behind summits of national leaders is that what those leaders want matters little. What they will get will be based on hard realities not subject to individual wishes. There is little room for solving the European crisis. If it could have been solved it would have been solved already. This isn't a case of the right position paper having yet to be written. The European financial crisis is a matter of profound divergences of interests.

No matter how many side meetings there are, or what the final communiqué says, there is the will of the 20 most powerful leaders in the world to consider. The one thing those leaders do know is that nothing said at this meeting – or most of the others – matters. History takes its own course on important issues."

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