3 2014, ON THE STATE OF THE TRANSATLANTIC RELATIONSHIP
Transatlantic relations continue to play a significant role in global economics and politics, despite the restructuring of the world order that has taken place following the end of the Cold War. The present balance of geopolitical power in the global economy shows a distinct superiority of the Atlantic partners in terms of size and strength — both economic and military.
The combined weight of the United States and the European Union in world GDP, although falling, still reaches 45 percent. The key emerging superpowers — China, Brazil, India and Russia — add up to close to 20 percent. Japan is not included in either camp. Similar differences persist in defense budgets despite the limited European contribution. However the trends in the next couple of decades play out, the predominance of the West is unlikely to be seriously affected so far as the measured indices are concerned. Qualitative factors, in particular the economic vitality, social inclusiveness and cultural appeal of the Atlantic powers, may exert greater weight on the future course of the competition for global influence between the West and the Rest.
In recent years, the reputation of Western economics has been severely damaged by the global financial crash, while the eurozone is facing unprecedented financial and political strains and the United States¢ political system shows signs of dysfunction, reflecting deeper social divisions.
Against this background, two developments stand out in 2013 so far as the transatlantic relations are concerned.
First, the growing difficulties encountered by President Barack Obama in overcoming Congressional opposition to implementing his second-term agenda. The specter of a lame-duck President is limiting the scope for substantial initiatives in either domestic or foreign fields which might help restore the West¢s leading power. Such initiatives would include the speedy implementation of the trade liberalization pacts with the EU and the Pacific powers — the Transatlantic Trade and Investment Partnership (TTTP
and the Trans-Pacific Partnership (TPP) — global financial reform, and development assistance policies in line with the Millennium Development Goals, as well as more effective intervention in resolving problems affecting global or regional security, such as the Arab-Israeli conflict, Iran¢s nuclear program and Syria¢s civil war.
Second, Angela Merkel¢s triumphant reelection for a third term as German Chancellor and the creation of a grand coalition government. This development helps to confirm German supremacy within the EU while also making likely that the eurozone will persist in applying intergovernmentalism and incrementalism in addressing Europe¢s economic and political weaknesses. This, in turn, would reflect Germany¢s selfcentered approach, consisting in promoting narrow national interests and retaining control over economic policies, both at home and — thanks to its preeminent position — in the monetary union as a whole.
So long as Germany and the other countries of the eurozone¢s core continue to block significant moves to economic and political integration and also insist on the universal pursuit of austerity policies, the monetary union is unlikely to escape from its present stagnation and growing internal disparities, notably between the North and the South.
Developments in 2014 should be viewed within the context indicated by the above remarks. No elections are expected to take place — barring unforeseen events — in any major country that forms part of the Atlantic community, with the exception of the U.S. mid-terms for Congress. Domestic politics will tend to follow established patterns. The U.S. economic recovery is likely to gradually gather pace while the eurozone¢s core economies will also start to move out from the recession, albeit in a hesitant way partly owing to constraints posed by restrictive fiscal policies and undercapitalization of the banks. In peripheral economies output fall seems to have hit the bottom, but recovery will be limited, with Italy and Greece also facing social tensions and political uncertainties.
In the international field, no major development is in sight. Trade negotiations in the framework of TTIP and TPP will proceed at a slow pace while progress in other areas such as financial reform and development assistance will be limited. Europe¢s banking union will enter the first stage of implementation, marking a step in rationalizing the eurozone¢s system of economic governance. However, the step is a timid one as extensive powers will be retained by national supervisors.
Transatlantic cooperation in resolving global or regional conflicts will continue, as in the past, constrained by domestic resistance to foreign intervention and Europe¢s overall weakness and political fragmentation. Domestic factors prevented President Obama from acting more decisively against Syria¢s use of chemical weapons allowing Russia to emerge as a fair international arbiter. Parliamentary opposition cancelled the U.K. government¢s intention to join forces in the planned action. France was left out in the cold waiting for guidance from the United States. Germany consistently refrains from taking or joining military initiatives in the international field, wary of domestic controversy and constitutional restrictions. Though public rhetoric on the subject is evolving in a positive direction, perceptible changes in attitude are unlikely. Weak European military budgets are further curtailed by recession and fiscal austerity and, together with political disunity, underline EU¢s foreign policy impotence. France, by consistently showing decisiveness in deploying forces abroad in association with the U.S., looks like the exception that proves the rule.
The overall picture is not a happy one. The transatlantic relationship falls far short of exhausting its potential for cooperation and related synergies, and displaying its leadership capabilities. International economic coordination is stumbling while global or regional security problems get less attention than they deserve and are, thus, allowed to eventually produce threats for stability and peace. Relations with China and Russia are also left relatively unattended as the U.S. “pivot,” or rebalance, to Asia is proceeding slowly and the “reset” with Russia failed to lead to meaningful results — stretching beyond Dmitry Medvedev¢s presidential term — while European policies towards these two superpowers are guided more by economic than by political considerations.
2014 looked as if it would not produce game-changing events in the transatlantic space. However, history has a tendency to outsmart political analysts, in much the same way as economists are often proven wrong in their predictions, and the Ukraine crisis may yet serve this role.
Bosch Public Policy Fellow, 2013–2014 Liberal Order
in a Post-Western World
