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Who Holds the Trump Cards?
Tragi-comedies of Error Across the Pond
by Robert Cox

Hamburg, G20, July. Brussels, October.

Away from the rioting outside two essential conclusions emerged in Hamburg. First, the core G20 meeting re-affirmed the outcome of the G7 a month earlier that on key issues Europe and the US are, if anything wider apart. On climate change both have dug in their heels in mutual opposition despite the expressed commitment to" combat the challenges of global climate change."

On trade, the US move towards protectionism was affirmed; Europe, like China and Japan, wants to champion global open markets. Second, Putin and Trump had a serious conversation which could lead the US and Russia backing-off from confrontation. Perhaps even more importantly, it could sow seeds of willingness to cooperate over the Middle East. These rapprochements could, for the sake of planet earth, override in importance the spasms of European paranoiac sweat that break out when the US and Russia appear to get to close.

"Uncoordinated policy actions" said the Hamburg G20 communiqué "will only lead to worse outcomes for all." True enough. Against the G20 background the moment is opportune to ask: what sort of evolving Europe is America dealing with? What sort of future is Europe carving out for itself? What are the issues which will continue to irritate relations between the two—but also where can Europe and America still find common ground? The transatlantic agenda is wide open.

Some reflections follow from the European side of the great Pond.

Handling the hegemon
For the first six months of 2017 Europe's chattering classes have complacently giggled or sneered with each new twitter from America's new presidential hegemon. Where on earth, dear fellows, will all this lead us? Now, stealthily, nemesis creeps up on Europe's elites. Sure, brave-new-world visions of political renewal are buzzing in Europe. And the long-blighted Eurozone is showing consistent signs of sustained growth, albeit modestly. Agonisingly it is slow to impact on Europe's perennial curse of skewed unemployment. The convergence of participant economies at the heart of the Eurozone project is slow to come.

Germany's Angela Merkel kept looks firmly set to keep her job after September's elections, but weakened. France's Macron has erupted to stand France's hide-bound politics on its head. But labour unions take their brand of conservatism to French streets against reforms. Political gun-slingers wait for him to stumble. The forlorn losers in France's recent elections moan about Macron's monarchical style. Yet France has long been a monarchy in republican clothing. In Britain, a republic disguised as a monarchy, the luckless prime minister, Mrs May wobbles from one error to another. Her antiquated Tory elite fears implosion while new enthusiastic young things transform opposition Labour. Brits wallow in the quagmire of Brexit, in thrall to that referendum result with little to show for it, now and in the future. Impossible to see how it can succeed. Impossible to say how the Brits can wean themselves off it. More about Brexit and Mrs May in a moment.

Political renewal?
Is the Macron result in France a harbinger of broad European political sea-change, casting the old left-right circus into oblivion? The short answer is probably—"no". Europe's populist parties certainly aren't doing particularly well this year. They have been bruised at the polls, particularly in Germany the Netherlands, France and Italy. Their breakthrough in Germany remains marginal, if a warning. Catalan breakaways in Spain are less powerful than they claim. Some say European voters have looked at Trump in the US and the UK's folly of Brexit and got cold feet about populism. More to the point is that neither Europe's populists nor its establishment politicians are providing answers to upcoming generations angry about inequality, precarity, austerity squeezing welfare programmes and education, fewer prospects than their parents had, blatant elite greed. The G20 in Hamburg paid lip service to "the concerns of the most vulnerable" but gave no guidance as to how to go about it. These frictions, as in the US, feed a certain left-right divide which is not about to go. In Europe, over time, that divide may re-emerge but under different labels.

One transatlantic distinction does, however, emerge more clearly. Europeans still have and want a protective shield of welfare corseted in a degree of étatism. They are prepared to pay the price in taxation for good public schools, efficient and affordable medicine, clean and secure streets, functioning public transport systems, and all other things that contribute to a more inclusive if not necessarily egalitarian society. The United Kingdom, as ever, behaves differently from the "Continent" of Europe. Tories—who see themselves, and are seen by many voters, as the natural party of government—have long, and particularly since the era of Reagan and his "political soulmate", Margaret Thatcher, muttered sotto voce their desire to scrap public healthcare and education and generally downsize the state. Just like Republics in the US. British voters, it would seem, are waking up to the consequences of this neo-liberal agenda and are starting to say "no". The scandal of poorer London high- rise apartment blocks, epitomised by London's Grenfell Tower fire horror, has further shaken belief in the merits of market-knows-best capitalism. Is Europe's "political climate changing" asks the FT (170705)? Perhaps, but don't expect revolution. But there is, as France is showing, for the first time in years, some fresh thinking about how to upgrade and redesign Europe's political and economic architecture. This applies not only to the individual member countries of the European Union but to the Union itself, its policies, its institutions, its vocation and ways of working. Bucking the trend and back-peddling is conservative Germany on the eve of a national election. Paul Lever, former British ambassador to Berlin, in his recent book Berlin Rules, put it thus: "Angela Merkel herself is not much interested in the institutional aspects of EU reform. She is happy with the system as it is." And (where Europe is concerned) "…there is no [German] underlying vision or purpose." This could soon be challenged.

Meanwhile across the water
And what will all this do the transatlantic partnership?

Europeans and Americans are basically pre-occupied with themselves. There's nothing new in that—but always within reason. In the same sense there's nothing new in Trump's "America First" doctrine. "Britain first" "La France d'abord" "Deutschland zuerst" are normal behaviour too in Europe. But EU member countries are locked into a corrective, contractual system of mutual obligation, pooled sovereignty. Americans perhaps always knew America was "first" and didn't need to shout it from the rooftops. Europeans said it sotto voce about their countries. But Europeans have woken up to realise just how much they do depend on the world's remaining superpower. Trump does not help his case by his outbursts that America has to become "great again", that "the world is laughing at US" and that the Paris environment Agreement screwed America. These are widely regarded in Europe as the nonsense that they are.

Some of us are old enough to recall J.K. Galbraith's famous saw of "public poverty" versus "public affluence." There is some consensus in Europe that that cliché remains true for the United States, and—had we not been careful—could have become much more the norm in Europe. Thomas Piketty has pointed out in his widely read and acclaimed (on both sides of the Atlantic) Capital in the Twenty First Century the growing inequalities of wealth throughout the western world. Inequalities more marked in the US than in Europe—a somewhat ideological perception of difference not to be snorted at. Perception of inequality is also a useful prism through which to look at much of European politics as it is now evolving.

More immediately is a growing worry in Europe that the US, under Trump, has become unpredictable and is prone to do rash things with impulsive decisions. This is a sea-change. Since 1945 most Europeans most of the time have seen the US as reliably predictable. This perception underpinned European confidence in the Atlantic Alliance. Now doubt is setting in. For some Europeans the new unease fails to take account of the fact that, despite Trump's avowed aim to clear the Washington swamp (Mussolini and the Pontine marshes?), the US still has an effective and powerful government machine which still has to do the leg-work of implementing presidential impulses—or not. And this despite the creaking of the US government machine under Trump's presidency, particularly the forlorn and demotivated State Department. For Europeans looking on, that same old confidence about the predictability of their principal ally is no longer there.

On climate change—an issue that gets overwhelming support in Europe—people on this side of the Atlantic know that a strong body of American opinion (led notably by mayors) recognises knows there is a the problem. Few Europeans now consider that the climate-change case and threat are fraudulent. A growing body of opinion is convinced that policies to combat climate change and related investment create growth, innovation and jobs. European governments will stick by the Paris Agreement. Their commitment is bolstered further by the knowledge that other big players like the Chinese agree with them

A potential US slide to protectionism breeds much European concern. The latest episode—Senate opposition to Russian gas supplies to Europe—heightens this concern. So do US threats to imports of steel—essentially against China, but sideswiping European steel too. US grumbles about automobile imports from Europe also grate nerves. Not that Europeans are wildly pure free traders. Newly elected French President Macron echoes long-standing French protectionist instincts. He is even getting some noises of protectionist sympathy from Berlin in the reviving Franco-German partnership arguably key to the prosperity of the European Union. Standard economic policy theory in Europe hails British valiant resistance to protectionism in the European Union. Such ideas are now largely debased by Britain's Brexit-driven marginalisation in that Union. Meanwhile, conveniently on the eve of the G20 summit, the EU clinched a trade deal with Japan in the wake of the agreement with Canada. A broad-ranging EU trade pact with China is not getting off the ground.

Another economic headache between the US and the European Union concerns the negotiation over Basel III—tightening up international banking regulation. The G20 in Hamburg called for "reining in the past excesses of the financial sector" but said nothing about present or future ones. Here is another example of the transatlantic ideological divide between more or less government. The US looks set to give banks a freer hand with the Republicans apparently hell-bent on killing Dodd-Franks. Europe, on the 10th anniversary of the US-led disaster of the international financial system that triggered its own stagnation and job losses, is most decidedly not prepared to give its banks—dodgy as some of them are (viz the latest rescues in Italy)—the benefit of the doubt.

On the eve of the G20 meeting in Hamburg a new bone of contention emerged when the US Senate attacked the Northstream pipeline project due to supply Russian gas to western Europe, notably Germany. The US pleads security concerns—European over-reliance on Russian gas. Europeans, and Germany in particular, denounce this move as a purely mercantile bid to secure European markets for US gas. Poland, with its traditional resistance to anything Russian, sides with the US. "Gratuitous" a former Obama adviser was reported as saying about Trump's performance in Warsaw. Trump's belated resurrection there of NATO article 5 will not re-assure sceptics further west like Angela Merkel. At least Trump avoided taking sides with Warsaw in its quarrel with the European Commission.

The neo-liberal pact set and sealed by "political soulmates" Ronald Reagan and Margaret Thatcher become the lodestone for transatlantic economic philosophy over the best part of 35 years. Where Europe is concerned that consensus is now dead. But Europe, as its recent political evolutions have shown, still has to agree on a new set of mantras to replace it.

Defence. Who carries the shield?
At the Brussels NATO Summit on May 25, 2017 President Trump omitted in his speech the traditional reference to Article 5 of the North Atlantic Treaty which enshrines the principle of collective defence of all NATO members. Since then US sources have been busily suggesting that this was not intentional. Germany's Chancellor Angela Merkel for one would have none of such generous interpretations. Within days of the Summit Merkel told an audience of her party faithful in a beer-tent speech outside Munich that Europeans must now "take their fate into their own hands." The clumsy appreciation of Trump's spokesman Spicer that this proved Merkel's relationship with his boss was "unbelievable" only made things worse. The damage has been done.

Referring to the Balkans, Germany's legendary Chancellor Otto von Bismarck remarked that getting tied up in a fire-fight in that notoriously fickle region was "not worth the healthy bones of a single Pomeranian grenadier." It is becoming increasingly difficult to find a European who believes that Washington will sacrifice a single GI to save any eastern European that Russia might feel inclined to gobble up, despite NATO military demonstrations in the Baltic States.

Against this background we are witnessing a new crescendo of European voices calling for an enhanced European defence capacity instead of or complementary to NATO. Supposedly this new enthusiasm has been freed up by the programmed departure of Britain from the European Union—the unfortunate Brexit. Britain over the years has doggedly resisted any European ambition to create an autonomous defence capacity. Britain's loud utterances that it will remain a staunch partner in Europe's defence is not—given the political mess the country has got itself into—does not readily convince its partners. That being said, Britain's European demise has not, in all credible reality, opened a royal way to a new European Union defence identity. The defence capacities, appetites and priorities of the remaining 27 member States are too diverse for that. At best something might be made of a shared commitment by a limited number of member States around a hub of closer Franco-German cooperation, supposedly now reinvigorated following Macron's election in France. Such a venture, however, is hardly for the short-term. And it is in the short term that there is a real, quintuple real threat hovers over Europe's security:

  • Hypothetical American disengagement from NATO;
  • persistent, if not worsening chaos in the Middle East;
  • meddling and nerve-testing by Russia;
  • new outbreaks of violence and disruption in the Balkans;
  • an increasingly unstable Turkey lurching in unpredictable directions.

The latter three constitute Europe's soft underbelly.
Of these let us dwell for a moment on the latter three.

Russia. In western Europe an ongoing debate bounces to and 'fro between those who want to be tough with Russia and those who want to "understand" it—the Russlandversteher in the particularly relevant political jargon of Germany. The latter maintain that throughout its history Russia has not invaded Europe—quite the opposite. A closer and critical look at history shows that this is clearly not the whole truth. Former British Ambassador to Moscow, Tony Brenton is probably closer in spirit to the legendary George F. Kennan when he maintains (I paraphrase): be clear and firm with Russia—but nurture the channels of dialogue. Meanwhile Europe's uncertainties about US intentions apply to Russia. What exactly is—or rather, will be—the Trump administration's policy towards Russia, if any? Europeans can be excused for feeling squeezed between a hostile Russia and an, at best, indifferent US where Russia is concerned. Russia, if anything, can deal with the US. The real threat it perceives is Europe. Too close for comfort. Russian citizens looking at what's up next door.

Balkans. Tensions in the Balkans are worsening, the complexities persistent. Ambassador Holbrooke's Dayton Agreement was arguably the best deal obtainable at the time. A quick glance at the political map of Bosnia-Herzegovina suffices to remind one of its volatility. Such patience as did persist in holding the country together looks increasingly thin. Denials from Tirana about encompassing Kosovo in a greater Albania merit scepticism. Macedonia is wrought with dissension and appetites. Incorporating Montenegro into NATO was not the smartest answer to that country's or wider Balkan vulnerability. Serbia's historical appetite for land and power simmers on. Incorporation of Croatia by the European Union has not stopped that country's slide away from democracy. Efforts by the EU to modernise the Balkans, and promote regional cooperation between the components of the former Yugoslavia, have made poor progress. For its own sake and security the EU should be ready to step up its efforts in the Balkans. All evidence has it that the EU has grown weary of the task. This is dangerous. To make things more complicated still Putin's Russia and Erdogan's Turkey show increasing appetites to interfere in the region, essentially in vulnerable Bosnia. How effectively they can cause trouble without getting hurt themselves merits scrutiny. This analysis—as ever with the Balkans—does scant justice to the myriad complexities that condition this persistently troubled region. Prospects of EU membership for any further Balkan countries are effectively dead.

Turkey. Another dead prospect is EU membership of Turkey. And it has been so for some time. Neither Turkey nor the EU have been honest with each other over this project. The spectre of Turkish membership —and floods of immigrants—raised by Britain's Brexiteers was one of the shabby arguments wielded in that fact-short campaign. The problem for both the EU and the US is to know where Turkey is headed under its unscrupulous and wanton ruler bent on wrecking one of the few middle Eastern success stories of the post-WW2 period. Europe's problem is to create some form of longer-term relationship with Turkey on a new footing. The answer may lie in the European Union's own future configuration—the thesis of an integrationist hard core surrounded by member States with less commitment. We will come to this shortly.

Quo vadis, Europa?
Europe's agenda has—reductio ad absurdum—five points.

Brexit. The "remaining" 27 member States have so far not let themselves be intimidated by London's often brutish and unrefined pursuit of its exit from the EU. Americans tell this author that all the Brexit going has been made London—what to do the other 27 EU members think? The "others" have so far remained united and calm. Of course they don't like the prospect of Brexit. It will do harm to them but arguably do more harm to the UK. Arguably too, the "others" have a stronger negotiating hand than do the Brits. Mrs May's case is not helped by speculation about her political future, dependent as she is on her own party's whims and on the support of a sulphurous party from Northern Ireland. But the lady has no obvious successor on the horizon. Rumours abound in London of even eurosceptics and Brexiteers having second thoughts - drop the whole nonsense. But for now they are hooked on their own pikestaff. A surreal touch on the sidelines of the Hamburg G20 was Trump's claim, after meeting British premier May, that a US-UK trade deal would be "signed soon." Anybody at all familiar with the Brexit business knows that Britain cannot independently conclude trade deals with any third country until it finally leaves the EU. That is several years away. Who was kidding whom? British trade officials looking for goodies in Washington in mid-October were described by their US counterparts as "going to Wimbledon armed with pingpong bats".

Immigration. Two philosophies dominate the field. The German case is poignant in the wake of Merkel's Wir schaffen das ("we can do it") claim at the height of the refugee crisis. On the one hand, as hard-rightauthor Rolf Peter Sieferle in Finis Germania argues (as do too predecessors like Theo Sarrazin), this is theend of some sort of cultural and ethnic purity. Islam, to make it worse, is seen by many, notably in France, as combatting hard won laicity in western society. The other side of argument comes from business which underlines out Germany's poor fertility rate (source - Eurostat) of 1.5 out of an unimpressive 1.58 EU average, and the 600 000 job vacanciesit has on its books. The debate will rage on. The immigrants do not have the qualifications that some wildly claimed at the outset of the crisis. Nor do they lend themselves to integration.

Defence & security. Few Europeans will deny that Europe's defence spending is inadequate. But many are critical of many US defence spending choices as in Iraq, Afghanistan, Egypt, Israel etc. And others will point out that the real problem with Europe's defence spending is not its quantity but its incoherence, duplication, lack of common standards for weaponry, and too much spending on bureaucrats behind bases rather than boots on the ground. Voices abound calling for a clearer, common European defence and security identity. But entrenched national interests, a doctrines and sensitivities mean that it will be a hard mountain to climb.

Place and alliances in world order. Europe may be a big component of the G20 but, at 7%, it is peanuts in terms of its share of world population. With 24% of world GDP EU-Europe can still command economic alliances. We have seen the eve-of-Hamburg EU-Japan trade pact. A few days earlier France's TOTAL oil company signed a $4.8 billion oil exploration and production deal in Teheran. TOTAL is a listed company not controlled by the French state. But such a deal would not have gone through without a friendly nod from Paris, and that on the eve of the G20. France was a key (and difficult) player in the Iran nuclear deal of July 2015. EU approval on July 6, 2017 of Iran's implementation of the deal (grudgingly accepted by the US) was a clear sign of the Union's determination to do business with the Islamic Republic, while keeping close to the Saudis. Not that Europe should have any illusions about being a key player in halting the slide into chaos of the Middle East. Europe's deteriorating relation with Turkey rules that out for a start.

Russia, we have seen, is a real problem. What, Europeans ask, is US policy to Putin? The aftermath of the Putin-Trump accessory summit in Hamburg is will be carefully studied on this side of the Atlantic. Europeans fear being squeezed between an increasingly assertive, hostile – perhaps unstable - Russia, and a US largely indifferent to what happens to Europe. Putin's hostility to the European Union is clear. It is closer to home and Russian citizens watch it. America is at a more convenient distance. Trump's disdain of the EU is equally obvious. So, what do Europeans do about it? Not much, is the answer. But when, one wonders, will some wiser counsels in Moscow decide (and persuade) that there is much more to be gained for a fragile Russia from cooperation with the European Union rather than the vituperative sniping into which it has floundered.

Recovery & reform. The current EU of 28 member States, product of successive enlargement, is unwieldy and incoherent. Things have got worse since some of the more recent members—essentially the Visegrad group comprising Poland, the Czech Republic, Slovakia and Hungary—show decreasing respect for EU core values such as respect for democratic institutions, press freedom etc. Added to this is tension over sharing the distribution of immigrants. The Visegrad countries are, unlike the original core, western member States, in the main, ethnically homogeneous and have no recent immigrant tradition—especially not from the Middle East or Africa.

For some years ideas have been floated of creating a so-called polyvalent, multi-speed or concentric circle EU—a hard-core group pursuing greater integration surrounded by countries with varying degrees of lesser commitment to policies and even values. Countries like Poland and Hungary, while taking increasingly Eurosceptic stances, of course now express shock at the idea of being relegated to some sort of 2nd or even 3rd division. Theoretically such a structure could even encompass some form of distant association with Turkey, remaining non-Balkan countries—or even the UK for that matter. The trouble is – what should the hard core consist of? The Eurozone? But that would include minnows like Malta, faulty states like Cyprus, convalescent (hopefully) Greece, and Eurosceptic Slovakia. Hardly a recipe for success. Predictably a reinvigorated Franco-German alliance, if it comes to pass, will look at ways of moving in this direction. But the outcome if is far from obvious. Important is to avoid a situation where all this distracts from Europe's fundamental needs. Above all a competitive economy providing jobs for a new generation, taking up modern challenges like advanced technology and education for the 21st century, controlled immigration, robotics, housing and less stressed cities. At present, the EU budget is skewed to outdated regional aid and agriculture. That is not about to change. Military research, however, would be allocated up to €1bn a year out of an overall EU budget of €150bn.

Holding out
Dire prophesies of a growing rift, even hostility, between Europe and the United States are as fashionable and prolific as they are often false. In some places, on either side of the Pond, such prophecies are doubtless the product of wishful thinking. Both sides are in transformation. The European Union has to redefine itself. It must sort out its future with a volatile Russia. The US—with a hopefully a leadership more tempted by sobriety and predictability leadership—has still, apart from frequently forgotten Canada, its most reliable ally across the Atlantic. And both Europe and the US have in common the task of meeting the anxieties and insecurity of their citizens in an age when the neo-liberal agenda has run out of steam. Europe, if it gets its priorities right, could still assume leadership in that battle. It still has to prove that.bluestar

Robert Cox,
Brussels, July & October, 2017


Author Robert Cox, born in London in 1938, read economics, politics, German and Slavonic languages at Cambridge University and the College of Europe. He launched into journalism with the The Economist in London, and later in central Africa. Cox then entered a second career with the European Commission, first in the Spokesman's service, then in the private office of Commission Member, George Thomson. After a spell with the Development DG dealing with policy & economics and North-South dialogue development negotiations he was appointed Head of the EC Mission in Turkey where he experienced the 1980 military takeover. On return to Brussels he held senior policy and management posts with the EC information services. On the outbreak of civil war in Yugoslavia Cox was detached to the EC Monitoring Mission in Zagreb. In 1992 he joined the new EC Humanitarian Office (ECHO) as its deputy head. Since retirement he has based himself in Brussels spending time painting, traveling and working on contemporary challenges facing the EU, notably with the think-tank Friends of Europe. He is married with two daughters and three grandchildren.

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