Monday, November 24, 2014

The European Oasis

PARIS – Are non-Europeans much less pessimistic about Europe than Europeans themselves? Could distance be a prerequisite for a more balanced view of the continent’s predicament?

In an interview a few months ago, Wang Hongzhang, the chairman of China Construction Bank, indirectly expressed his subdued enthusiasm for Europe. Quoting the Chinese proverb, “A starved camel is still bigger than a horse,” he went on to say that Europe’s economies are much stronger than many people believe. And, without saying so explicitly, he suggested that the time was right to go on a European buying spree at the right price.

Of course, not everyone would share this optimistic vision. Across the English Channel, British Euroskeptics rejoice that they have kept their distance from a “sinking ship.” But, while The Economist recently described France as being “in denial,” the same could be said of the United Kingdom. True, the French had neither the Olympic Games nor a royal celebration this year; but, when it comes to the state of their economies, the two countries are largely in the same boat.

If one travels to America or Asia, as I did this autumn, Europe’s image becomes selectively brighter: while it continues to be perceived as a positive model, it is no longer considered a global actor. Seen from the United States, Europe may no longer be a problem, but it is not considered a part of any solution to the world’s problems, either – with the possible exception of those that concern Europe directly (and, even then, doubts linger).

Yet, for many international investors, Europe continues to be, or is once again, a risk worth taking, if not – as in the case of Wang – a golden opportunity. In a time of growing complexity – and thus uncertainty – investors want to hedge their bets. At least some of the BRICS countries (Brazil, Russia, India, China, and South Africa) appear to be running out of steam economically; and, while new emerging powers, such as Mexico, are tempting, they may prove to be more fragile than they look.

In this context, Europe may be a tired, aging, and depressed continent, but, as its luxury and aeronautics industries attest, it would be premature to bury it. Relative decline is obvious: Europe accounted for 20% of the world’s population at the beginning of the eighteenth century, but only around 7% today, while its share is expected to be even lower in 2050. But demography is not destiny: a small population has not prevented Singapore from sustaining a hyper-competitive economy.

Europe may not be a source of economic inspiration, but it still makes people dream. It is perceived as a model of “civility.” Whatever their other disagreements, Chinese and Japanese concur on one point: if Asia today, with its rising nationalist tensions, evokes Europe in the first half of the twentieth century, it is precisely because Asia has not embarked on a reconciliation process such as that which enabled France and Germany to transcend their centuries-old rivalry.

Likewise, Russia’s president, Vladimir Putin, may emphasize the specificity of “Russian civilization” in a manner evocative of nineteenth-century anti-Western thinkers; but many in the Russian elite still consider the European Union, despite its many weaknesses, the most civilized model of governance that exists. When Chinese seek a benchmark model for social protection, they go on study trips to Scandinavia.

But can Europe remain a model if it is no longer a serious geopolitical actor? When US officials say to the Europeans, “We need you,” what they mean is quite minimal: “Please do not collapse and bring down the global economy with you.” Europeans have become the Japanese of the West – financial contributors who at best play a supporting role in global strategic affairs.

For example, if the Israeli-Palestinian conflict can still be resolved, a solution can come only with strong US involvement. Barack Obama, who wants to be a transformative president like his role model, Abraham Lincoln, could do worse to deserve the Nobel Peace Prize that he received prematurely than to facilitate a comprehensive Middle East peace settlement. Few expect such a colossal achievement, of course, but far fewer expect anything remotely similar from Catherine Ashton, the EU’s foreign policy czarina, or, for that matter, any European leader.

Europe remains a significant economic and commercial actor – one that can rebound at any time, now that it has at least partly transcended its systemic crisis. It also remains a model of reconciliation in which people can continue to dream, despite unacceptably high levels of unemployment, particularly among the young.

But Europe is no longer perceived as a global actor – and rightly so. It is an oasis of peace, if not dynamism. The question for Europeans today is whether they can – and, more important, should – be content with their status.

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    1. CommentedPaul A. Myers

      The correct model for the 21st century might just be enlightened self-economic interest. Possibly Germany under Angela Merkel is the big country most successfully following the "correct" model, not American neo-imperialism under any particular American president.

      Singapore in many ways is the right model to emulate in the future, and Europe is well poised to do that. The challenge is to take the great educational and expertise "assets" of Europe and integrate these strengths into a worldwide economic competitor. Many parts of Europe are already successfully doing just that.

      In contrast, let's posit the premise that the US can no longer play a decisive global strategic power role, nor any other country. Possibly the US will continue to try to play a role that is no longer possible in the world. Possibly the long post-World War II paradigm is coming to an end.

      One of the elite "pipedreams" of the current age is that somehow the US could broker a Palestinian-Israel peace. The chance of the US playing a "transformative" role with Israel is vanishingly small.

      Possibly in the future the US can play, with other nations, an incremental balancing role in geopolitics. But the days of marching in and trying to reorder a society look like they are over.

    2. CommentedZsolt Hermann

      Unfortunately this article is still based on that illusion that the world economy is in some kind of a pause, like half time in a soccer game, and very soon the second half starts and the dormant economic machinery starts turning again.
      The camel, and the horse and all the others in fact, are not only starving but they are almost dead, because what they were feeding on so far has disappeared.
      We are not in a crisis, or recession, but in a system failure, the dream of constant quantitative growth is over.
      The drive, which used to be the excessive and harmful overproduction and over consumption has to be changed, the camel needs to get used to a new food, that is a natural necessity and resource based economy.
      Moreover in the global, interconnected human network the previous fragmented, self obsessed, subjective, individualistic or nationalistic planning and decision making cannot work, only a systematic approach, taking the well being of the whole system into consideration can yield any prosperity or sustainable progress.
      And this is where Europe could provide an example.
      The European countries started an experiment with the Union which if successful could provide the blueprint for the world to follow.
      But for that to work the leaders of the Union need to bite the bullet and accept that only a deep, full integration can truly fulfill the initial promise due to the present interconnected and interdependent human system.

        CommentedEdward Ponderer

        The need to feel in control, the fear of one's expertise evaporating, often leads to blind trust in long-established paradigms without examination -- even if these have evolved beyond recognition, and reality proves only a vague shadow of prediction.

        Subsystems are being undermined in terms of distrust in human relationships (behavioral economics), and the global upper system is reaching the limits finite global markets and resources.

        In short, insides of black boxes gears are grinding and springs are popping, and from above, we are beginning to run into a wall as well.

        A new global sense of interdependence developed through a plan of integral education is becoming critical to follow and master the ever-changing local realities feeding into the global whole. There must be a sense of mutual guarantee on national, corporate and individual levels -- that we all become as input sensors into the whole.

        To proceed with number values and wait for the recycling of a cloud formation, may prove a very long wait.