Europe's Crisis of Crises

Originally published at the Washington Times

Callista and I have been on a great cruise up the Rhine River from Amsterdam to Basel. We were fortunate enough to be invited on this trip by friends with the Navy Supply Corps. They are a fun group and the trip has been very enjoyable.

In addition to savoring the beauty of the Rhine River Gorge (a World Heritage Site) and the historic cathedrals and castles (the Cologne Cathedral, for instance, took 800 years to build and alone would have been worth the trip), this is also an opportunity to reflect on the economic, political and social challenges facing Europe.

Europe is faced with a crisis of crises.

If the Europeans only had one major challenge, they could focus on it and solve it.

Unfortunately, however, they face a number of urgent problems, and the solutions for some could actually make others more difficult to solve.

Of course, it is worth pointing out at the beginning that still Europe enjoys enormous strengths. It remarkably wealthy and has a huge population of educated, skilled workers.

The European quality of life, with long vacations and extended summer weekends, is still something for Americans to envy, if not to emulate. It was remarkable to see large camp grounds full of trailers and motorhomes on the Rhine and the Mosel, where the Dutch in particular seem to enjoy staying (leaving behind their heavily populated, indeed crowded, country).

The European welfare states still offer health and education benefits that their citizens prize.

And Europeans’ cultural focus on museums, parks, historic sites and zoos (my favorite) means they have many of the best cultural institutions in the world.

Cruising up the Rhine, it was obvious from the river traffic and from the constant procession of freight trains that the German industrial economy was still strong and impressive.

There are, however, at least six deep challenges to the heart of the European experiment.

First, the creation of the Eurozone, establishing a common currency, was in retrospect a step too far. A Euro that is strong enough for Germany crushes the Greek economy. A Euro weak enough for Greece guarantees inflation in Germany. This 21-year experiment has been a great asset for the German economy, as countries like Greece that had weaker economies could borrow money to buy German products. Now, the weaker economies can’t pay back all of the borrowed money. This is an economic, cultural, political and social crisis, and it is a long way from being resolved.

Second, Europe has accepted a large number of migrants from foreign cultures without any methods or systems for assimilating them. This has been an invitation to disaster. From Sweden to Hungary, country after country is now adopting increasingly tough policies for migrants. This will lead to growing tension between elites--the politicians, intellectuals, and business leaders--and the vast majority of the European public.

Third, the relatively slow growth rate of the European economies further heightens tensions created by the Euro and unassimilated immigrants. The high taxes, strong unions, bureaucratic controls, burdensome regulations, and a general bias against entrepreneurial creativity all combine to slow European growth rates. This leads to lower incomes and greater unemployment among young people, and thus, dissatisfaction.

Fourth, while the 71 years since the end of World War II are the longest period without a major war in Europe since the Roman Empire, this peace has been sustained through American leadership structured around NATO and a very strong American military. As Europe has grown wealthier and as Americans have grown weary of carrying the burden, there is renewed pressure on the Europeans to pay more for peace. Yet their welfare states, their slow-growth economies, and the biases of their domestic political systems all conspire to drastically under-fund defense. This inability of Europe to defend itself is being highlighted by the emergence of threats from Putin's Russia, Islamic supremacists, the emergence of a missile-capable Iran, the rise of China and the pressures of mass migration. The continent’s inability to guarantee its own security will be a major challenge in the next decade.

Fifth, the rise of the European Union bureaucracy in Brussels has further undermined public support for the EU. Brussels bureaucrats are even more arrogant and interfering than Washington bureaucrats. The elected branches of the European Union are too weak to rein in the bureaucracies (and many of their members have no desire to do so). Power has shifted from elected officials in national capitals to nameless, faceless bureaucrats hidden within the Brussels superstructure. If Europe is to have a future of freedom, the elected institutions will have to be dramatically strengthened and the bureaucrats brought within an accountable, transparent system. That alone would be the work of a generation.

And finally, sixth, if the American political system at times seems too open to talent and reinvention, the European political systems are often too rigid, too isolated, and too much of an insider's game in which reformers find it virtually impossible to compete or to gain attention. In any one year, this insular system seems to work fine, but over time, it blocks necessary changes, ignores growing public anger and forces reformers to increasingly extreme positions.

These six crises are coming together to create a very challenging future for Europe.

A reasonably creative elite could probably solve any one or two of these problems, given enough time and opportunity to focus.

Whether Europe’s leaders will be able to simultaneously handle six major challenges is very doubtful and puts at risk the entire European experiment.

Your Friend,
Newt