For the first 20 years of my working life, about the easiest general political risk call I could make — whatever the crisis — was that the EU could be counted on to punch well below its weight. Despite having one of the three largest internal markets in the world (along with the US and China), Brussels was bound to disappoint, doing little practically in terms of furthering its specific foreign policy goals, as often it didn’t have any. Nor was it prepared to expend the blood and treasure necessary when it did.
Perennially betting against Brussels — economically sclerotic, militarily impotent, and geopolitically divided — did nothing to harm my political risk call record. Better still, from my point of view, the EU (shamefully) subsidized a coterie of supposedly independent foreign policy experts, who — well aware of where their bread was buttered — functioned at international conferences as little better than cheerleaders.
On the rare occasions the EU was successful, these partisans would trumpet this as a sign that Brussels was ascending to superpower status. When it failed, the not-so-neutral experts would sagely intone that, in failure, the EU would “do its homework,” using its missteps to make the next great leap forward in terms of its integration. This circular analytical reasoning mostly fooled those who were themselves spouting such logical nonsense, but my competitors’ being constantly wrong about Brussels has been very good for business.
However, as the historical adage has it: “There are decades where nothing happens, and there are weeks where decades happen.” With the Ukraine war, we are living through such weeks. A primary requisite of first-rate political risk work is to constantly check assumptions, even those such as my call about the EU, which have been on the money for decades. For the adage is right: Things change, the world changes in an instant; and we have to be ready for it.
In the case of the EU, the basic problem has always been Germany, its economic motor and by a long way its most important state. Henry Kissinger neatly encapsulated Berlin’s historical tragedy: It is too small to dominate the whole of Europe and too large to be just one of a series of European great powers. This uneasy structural reality was greatly exacerbated during the do-nothing years of Angela Merkel’s chancellorship, when for decades nothing happened except Berlin making of itself an intellectual and strategic black hole.
Steadfastly refusing to end its ruinous holiday from history, Merkel’s long, dreary rule led to Germany adopting a mercantilist, economics-first foreign policy, valuing its increasing trade ties with China and comfortable with its energy dependence on Russia. Putting itself in such a strategic straitjacket inevitably lead to Germany adopting a quietist, quasi-neutralist foreign policy, as to rock the boat by siding with the West against these revisionist powers would have had real and disastrous economic consequences. Never said in all this flawed logic was that it was Merkel who was deciding to wear the straitjacket of her own free will, rather than a cruel indeterminate fate thrusting such a choice upon her.
For a generation, this neutralist Germany has made the adoption of a genuine common European foreign and security policy an impossibility, as with a Gaullist France tugging one way and an Atlanticist northern and eastern Europe another, a chaotic tower of strategic babel was the only possible outcome. It was Merkel’s steadfast refusal to re-arm and to have any real outward-looking foreign policy that made a mockery of every effort at Europe forging a common strategic identity. As long as Merkel’s isolationism held sway, betting against Europe was easy.
But, in the blink of a historical eye, things have changed. In about 10 days the new German government of Olaf Scholz adopted almost every policy I have been begging them to undertake for the past 20 years. Germany can, after all, meet NATO’s 2 percent of GDP pledge for defense spending. Better still, after a generation of Germany’s weapons systems atrophying, Scholz has set aside €100 billion to bring its military kit up to speed.
In energy policy, too, big changes are afoot as Berlin has de facto abrogated the Nord Stream 2 pipeline project with Moscow, after decades of western pleas for them to do so fell on deaf ears. Equally significantly, Germany’s isolationist drift has been halted as it moves resolutely back into the US-dominated Atlantic camp. Simply put, in 10 days there has been more strategic movement in Germany than in the past 20 years.
At the higher, European level, Germany’s sea-change alters everything. Suddenly Europe is, in the medium term, not going to be militarily impotent; rather, with a re-arming Germany and an already militarily capable France, it will be a strategic force to be reckoned with. Vitally, Europe’s collective strategic drift toward either neutralism or chaos is also at an end; it is now solidly in the Atlantic camp.
There are surely many bumps in the road ahead, and changes this profound will not proceed in an easy straight line. But that does not lessen the momentous importance of the past few days. Europe’s medium-term strategic position in the world, for the first time in my working life, is on a decisive political risk upswing.
This post was originally published in Arab News.