-Caveat Lector-
-------- Original Message --------
Subject: [Activist_List] The Rise of Europe
Date: Sat, 04 Nov 2000 20:51:26 +0200
From: Maria Dim <[EMAIL PROTECTED]>
Reply-To: "Activist Mailing List" <[EMAIL PROTECTED]>
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Activist Mailing List - http://activist.cjb.net
http://www.antiwar.com/szamuely/pf/p-sz110300.html#rest
November 3, 2000
Washington's Nightmare: The Rise of Europe
Globalization is not going to happen. Borders are not about to come
down;
states are not about to disappear; US corporations are not about to take
over the world. The moment of global US supremacy has come and gone. The
world is dividing into geopolitical power blocs. The United States today
confronts a superpower rival stretching across much of the Eurasian
landmass � the European Union allied with Russia. The European Union,
once
merely a trading bloc, then a single internal market has evolved into a
political federation, aspiring to its own foreign and defense policy.
Now it
is threatening to make Russia�s vast energy and mineral resources its
own.
This is the stuff of Washington nightmares.
Since the Second World War, successive US Administrations have
championed
the cause of European unity. They never took the idea terribly
seriously, of
course. The Europeans had been fighting one another for centuries. They
were
hardly likely to become peace-loving nations now. By European unity
Americans meant little more than the creation of institutions to
facilitate
compliance with Washington�s commands. Rather than having a dozen
capitals
to call, the President of the United States could convey his wishes with
a
single phone call to Brussels. The European Economic Community � as it
was
once known � was seen as a mechanism to ensure that the Europeans paid
their
share of NATO�s costs and did not wander off the reservation pursuing
their
own separate foreign policies.
Throughout the Cold War, any assertion of European independence was met
by
US threats to withdraw from NATO. It was all a bluff, of course, and the
Europeans knew it. The Americans were not stationing hundreds of
thousands
of troops on the European continent out of the kindness of their hearts.
Washington had always regarded NATO as a mechanism to ensure US
supremacy
over potential economic and political rivals. Nonetheless, the Europeans
went to some trouble to avoid antagonizing the United States by overt
displays of independence. The Soviet Union was still around, and no one
in
Europe wanted to shell out large sums of money on defense. This suited
Uncle
Sam just fine, and thus was relationship of mutual dependence born.
Europeans lived comfortably and America got to be "leader of the free
world."
The end of the Cold War inevitably brought all this to an end. There was
now
nothing to stop the Europeans from asserting their independence. While
the
US subsidy was still nice, there was no real need for it any longer.
Europeans could make do with a much smaller defense budget, one that
even
they could afford. The economic rivalries that had been suppressed for
the
sake of Allied unity during the Cold War broke out into the open. As
individual nation states the Europeans could not possibly challenge the
Americans. They were too small and vulnerable for that. But as member
states
of the European Union they comprised a Great Power. I wrote last week
about
the multiplying trade disputes between the two continents. The World
Trade
Organization has served to increase the ferocity of these fights, since
everyone ignores its rulings. Indeed, it can only be a matter of time
now
before either the United States or the European Union pulls out of the
WTO
altogether. The US claims that the EU gives preferential treatment to
bananas imported from its former Caribbean colonies. The WTO ruled
against
the EU. The Europeans ignored the ruling; the US unilaterally imposed
sanctions. The United States claims the EU unfairly restricts imports of
hormone-treated beef. The WTO ruled against the EU; the EU ignored the
ruling; the US imposed sanctions. The EU claims the US subsidizes the
exports of its multinationals, through the creation of so-called
"foreign
sales corporations" � paper companies that US exporters have been
allowed to
set up abroad for the purpose of claiming breaks their US tax bills. The
WTO
ruled in favor of the EU; the US ignored the ruling; the EU imposed
sanctions. Now the US is claiming that the EU subsidizes Airbus
Industrie,
Boeing�s chief European rival. Recently, the United States proposed to
the
World Trade Organization that governments change the way they subsidize
farmers. Under the plan, the current domestic subsidies system would be
revised to eliminate those agricultural subsidies not directly linked to
price and volume of output. There also would be a ceiling on the level
of
domestic subsidies based on a percentage of the country�s total
agricultural
production. The Europeans strongly object to this proposal. The EU pays
farmers not to farm. On the other hand, the Europeans claim that the US
also
subsidizes its farmers through the annual disbursement of "emergency
aid."
Alongside these economic rivalries are the political disputes. The
United
States is supporting Kosovo�s right to secede from Serbia. The Europeans
oppose it. There is little enthusiasm for a Greater Albania � a state
that
would do for global criminal enterprise what Khomeini�s revolution did
for
the revival of Islam. Yet the Americans continue to push for it. The
Europeans suspect that the US objective is to create problems for them
down
the road. According to The Guardian "independence [is] fast becoming a
reality on the ground because almost half the Kosovan Serbs had left the
province and the Kosovo Albanians were setting up their own judicial and
political system." The paper quotes a senior US official explaining:
"Kosovo
will not be pushed back into Serbia." The same official goes on to argue
that while UN Security Council Resolution 1244 "explicitly recognizes
the
territorial integrity of Yugoslavia� it does not mean Kosovo cannot be
independent." The level of dishonesty on the part of the United States
is
breathtaking. The secession of Kosovo is being justified on Realpolitik
grounds: the Albanians want no part of Serbia, so it is pointless to
insist
that they stay. Yet this tough-minded realism does not apply to the
Bosnian
Serbs who want no part of the bogus state of Bosnia, preferring to
belong to
Yugoslavia. Nor does it apply to the Kosovo Serbs in the northern part
of
the province. They also would prefer to belong to Yugoslavia.
Most outrageous of all, the Security Council Resolution states
unambiguously
that Kosovo is part of Yugoslavia. But to US officials a decision that
every
country in the world has given its assent to is merely a scrap of paper,
to
be ignored whenever convenient by a piece of lawyerly legerdemain. This
is
the kind of dishonesty that drives Europeans � and just about everyone
else � up the wall. It is of a piece with Vice President Al Gore�s claim
that building a national missile defense system would not violate the
1972
ABM Treaty. The idea is absurd. On both Kosovo and on the ABM Treaty,
the
Europeans are in agreement with the Russians and in strong opposition to
the
United States.
Actually, the Europeans and the Russians agree on many other issues as
well.
They are both opposed to any further expansion of NATO. They are both
much
more sympathetic to the Palestinian cause than the United States. The
Russians and the Europeans (with the exception of Britain) have for
years
urged that the sanctions on Iraq be eased. The Russians recently ended
the
embargo on air flights to Baghdad. The Europeans are likely to follow
suit
before long. The Russians announced recently that they did not consider
the
UN air embargo to be justified under the UN resolutions. Soon after, a
Russian plane, carrying humanitarian supplies and a delegation of oil
officials and politicians, landed in Baghdad. The Russians are almost
certainly correct in their interpretation of the Security Council
Resolutions. They did not bar commercial airline flights. The ban was
merely
something the United States insisted on. As a result, Iraq has been
without
regular airline service for a decade. The Russian airline Aeroflot is
also
planning to reopen offices in Baghdad in anticipation of resuming
flights.
The French also made a flight to Iraq recently. Aboard were about 60
French
doctors, artists and sports personalities. The United States demands
that
these flights to Iraq cease. But its influence over the Europeans
diminishes
daily. During the Cold War, there was the standard threat to pull out of
NATO and let the Europeans face the Russians on their own � "agonizing
reappraisal" in John Foster Dulles�s famous words. But what can
Washington
threaten now? To pull out of the Balkans? That would be a dream come
true
for most Europeans.
Incidentally, Iraq handsomely repaid European generosity the other day.
Saddam Hussein threatened to withdraw his oil exports from the world
markets
unless Iraq�s customers paid him in euros instead of dollars. He called
the
dollar "enemy currency." The dollar is, of course, the traditional
currency
of the oil trade. Iraq then asked the United Nations to create a
euro-denominated account to handle the deposits. He is sticking with the
euro even though interest rates on euro-denominated accounts are lower
than
those on dollar accounts. The UN oil-for-food deal lets Iraq sell oil
over a
six-month period on a renewal basis to buy food, medicine and other
humanitarian goods. Iraq did back down slightly a few days later by
promising to continue to accept payment in dollars for the time being.
But
this is likely to be a temporary respite. For the Europeans Saddam
Hussein�s
gesture was a timely boost for the euro.
The Europeans and the Russians recently signed a number of important
agreements. They comprise what is coming to be called a "strategic
partnership." Russia will supply Europe with oil, gas and electricity.
In
return Europe will invest in Russia�s fuel production and transport
industries. The European Union would oversee the construction of
pipelines
to transport oil and gas to the West. The project is dues for completion
in
2020. Currently Europe imports 75 percent of its oil from OPEC. The
Europeans are anxious to reduce this. They want no repetition of the
recent
massive protests against soaring oil prices. Russia has abundant energy
resources. Geologists estimate that the oil reserves of Komi, a Russian
republic in the Arctic less than 700 miles from Moscow, could supply the
entire planet for 12 years. The Komi reserves are thought to be about
126
billion barrels. At today�s prices of roughly $32 a barrel, the oil is
worth
around $4.032 trillion. This week, Russian gas giant Gazprom announced
it
was forming a new consortium with leading gas companies from Germany,
France
and Italy to build a $2 billion pipeline for gas exports that will bring
an
extra 60 billion cubic meters of natural gas supplies to the European
Union
every year.
The other day, former Treasury Secretary Robert Rubin delivering the
same
speech he and his colleagues have been delivering for the better part of
the
last decade: "The key for the euro is for Europe to undertake the
structural, regulatory, open-market reforms that will make Europe more
attractive for investment and attract capital inflows rather than
experiencing capital outflows." "Eurosclerosis," the "European basket
case" � we have been hearing these complacent assertions backed with
very
little serious evidence for years. Leave aside the issue of how a power
that
runs a record trade deficit presumes to lecture a power that runs a
trade
surplus. The important question is this: What will happen � as it
inevitably
must � when the US stock market takes a tumble? With no capital flowing
into
Wall Street, the trade deficit will be unsustainable. Therefore, either
the
dollar collapses. This will lead to inflation. Or the Fed raises
interest
rates in a big way. This will lead to a recession, more likely a
depression.
The European economy, not as dependent as that of the US on the stock
market, will be in not bad shape to deal with such a crisis. We will see
then just how far the Europeans and the American will be prepared to
take
their rivalry.
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