by Giles Merritt*
From defence to international trade and finance, Europe either strengthens its hand or cedes greater mastery to China.
It’ll take time for the European Union to up its game, but it must signal that it is doing so. Messaging is crucial in this era of global communications, so Europe has to revolutionise its outreach. If Donald Trump has taught us anything, it is megaphone politics.
The ‘American century’ is ebbing away. Even before Trump’s casual destruction of trust in America’s commitments, the fading of US hegemony was evident. For Europe, the question is what areas should it focus on to remain a major player?
Three distinct areas are already clear. A greater role for the euro, a much louder voice as a trustworthy information source, and a stronger weight in international trade and investment. None can be achieved overnight, but the spadework must begin while Trump is flailing around and destabilising systems that represent 80 years of painstaking progress.
The first area is in hand, although public opinion has not yet been alerted because the EU is so bad at communicating. Autumn will see the arrival of a ‘digital euro’ that can free European consumers from US-based credit and debit card systems like Visa and Mastercard.
It’s the first step in Europe’s pushback against US dominance of international payments through the Swift system for bank transfers and its promotion of crypto-currencies and dollar-denominated ‘stablecoins’. Dwindling faith in America’s goodwill is hastening the European Central Bank’s efforts to loosen the eurozone’s dependence on US payment mechanisms.
Washington’s financial power through sanctions or controlling investors’ access to their deposits now frightens even its allies. Overall, the EU’s thrust will therefore be to promote the euro as a thoroughly reliable reserve currency, and to achieve its long-delayed Capital Markets Union. The aim is to become less dependent on Wall Street and to launch mutually-funded Eurobonds to finance EU members’ defence spending and other common projects.
There is a chicken-and-egg quality to all this. Public support is crucial to such a highly political project. This demands far better outreach than the EU has ever achieved, both within Europe and worldwide. It must create a much more positive global image if it is to exploit resentments against Donald Trump’s autocratic bullying.
Deepening turmoil reinforces the need for independent and credible European news and current affairs broadcasts around the world. Beefing up TV and radio reporting would spearhead a wider cultural and entertainment drive that emphasises the EU’s commitment to international development and climate change.
Brussels dipped its toe in the waters of television 20 years ago when it backed the launch of Euronews, but then failed to sustain its financial help. The channel has since morphed into a loose franchised network owned by a Lisbon-based company said to have close links to Hungarian leader Viktor Orbán. Euronews’ reporting is in fact independent (it is unambiguously pro-Ukrainian), but it isn’t a viable basis for a future EU broadcasting giant.
Creating a powerful multi-lingual Voice of Europe would be expensive and politically adventurous. But desperate times call for desperate measures, and communication has been the EU’s Achilles’ Heel for far too long. It’s time the Commission had the courage to champion something like it.
The third area for much tougher European action is the easiest – international trade. Trump’s tariff war highlights the plight of the World Trade Organisation, so the EU should be advocating a parallel body open to all countries that espouse free and fair trade rules.
Rising US protectionism has for some time frozen the WTO’s disputes settlement mechanisms, making a zombie of the Geneva-based body that expanded the earlier GATT and triggered the boom years of globalisation.
If Washington won’t agree to the streamlining and reinforcement of the WTO, Brussels should call for a parallel organisation to be debated, negotiated and established as a matter of urgency.
China, whose admission to the WTO enabled its export bonanza, should be invited to sign up to this WTO-2, although with guarantees to abide by stricter rules on dumping and unfair subsidies.
The thread running through these three areas is that the EU must be more proactive, no longer limiting itself to reacting to upsets. As to having to choose between the US or China, Europe’s challenge is to compete with both.
*Founder of Friends of Europe
**first published friendsofeurope.org
By: N. Peter Kramer
