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The New European Map

Euro Crisis Drives Strategic Challenges

Sep. 2, 2012 - 03:16PM   |  
By HARALD MALMGREN and ROBBIN LAIRD   |   Comments
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The Euro crisis is defining the end of a period of history. The era since 1991 has been defined by the expansion of Europe, the consolidation of NATO, and America as the hinge that held much of the strategic map together.

At the heart of these convergent developments is the idea that a European currency would be combined with a European foreign policy and a European defense. Security, defense, a common currency and convergent development and growth paths would create a new global entity, a new Europe.

But now, new centrifugal forces are widening political, social, economic and security differences within the EU and among its neighbors. The deepening recession is increasing differences among citizens and encouraging nationalism and political localization.

This crisis comes as new dynamics are emerging and rewriting the map. The Arab Spring, the rise of Iran, the Syrian crisis and the operations against Libya’s Moammar Gadhafi are raising the global profile of the Middle East. The Russians are focused like a laser beam on an energy policy that will enable them to play a key role in Europe and Asia. The Arctic is one of the centerpieces to Russian strategy. And the Chinese are leveraging their global economic assets to find a new place in Europe and the Middle East.

Europe will be challenged as many intertwined strands of integration are rolled back, fraying what has been an intricate but incomplete tapestry. It is questionable whether Europe will be able to maintain the integration process.

This puts into play the strategic strands of currency integration, economic development and common security and defense agendas. Choices will have to be made, and convergence is not the most likely strategic direction. But with disaggregation will come reaggregation that will reshape a new European political, economic and security map. Three key actors will lead the way.

Germany will help reshape and downsize the Euro zone into what might be called the Ger-Euro. Germany’s economic and political weight will rise as the Euro crisis goes on. German influence will push the Euro zone into a more cohesive, responsible and integrated core.

But this is a united Germany, not the divided Germany that had to accept the dictates of smaller European powers to end its national division. It is a Germany that recognizes its future will be increasingly intertwined with Russia and the Far East. It is a Germany already pivoting east.

But German leadership will not translate into security and defense policy. That will happen elsewhere.

Next are the Nordic states. These are not part of the Euro zone but are key players within Europe. And in many ways, the Nordics might be the architects of the new phase of Europe.

The Arctic’s future is central to Denmark and Norway. All of the Nordics except Finland have independent currencies and clear concerns about the dominance of Russia in energy markets within Europe. And indeed, Finland might be the first state in the Euro zone to exit the Euro. They have no confusion about the Russian challenge or the need for a U.S. connection in exploitation of the Arctic.

Finally, there is Greece, which has become a metaphor for a weak economy, little prospect of economic growth and lack of political will to confront the cost of social expenditures. The emergence of NATO was rooted in a Greek crisis; perhaps the new European bargain will be as well.

Greece will be a leader in generating new openings in the defense and security texture of Europe and will be correlated with security and defense challenges rising within the Mediterranean and the Middle East.

Europe’s new map will pose significant strategic consequences for core NATO states. The Nordic states will anchor defense and security policies for the decade ahead and this will have implications for European states serious about defense but will, in turn, force change on their part as well.

A state like France may have to craft a policy that follows Germany on currency and the Nordics on defense. The Nordics seek ever-greater energy independence, a course that France can pursue with its nuclear energy capabilities but a course that clashes with German preferences.

Unlike Germany, France is a nuclear power and relies on nuclear energy to allow greater independence from sources such as Russia or the Middle East.

In defense, France will follow the money and will have to work with those European states investing in defense, which is neither the U.K. nor Germany. This means the French forces’ ability to work with Nordic states would become important in the years ahead. French airpower built around the Rafale would have to find ways to work with states like Norway whose airpower will be rebuilt around the F-35.

Additionally, the Greek dynamic could reopen concerns on NATO’s southern flank. The weakening of Greece, and the high probability that Athens will go its own way on currency and other economic issues, is occurring in the midst of the growing Chinese global economic reach and Russian activism in the Middle East. China and Russia will be eager to engage Greece with its geographic position on the Mediterranean Sea.

The Euro crisis is a key element in reshaping European defense and security challenges and in reshaping alliances within Europe itself.

This op-ed was based on a longer report published by Second Line of Defense in the Strategic Inflection Points series, “The Strategic Consequences of the Euro-crisis.”

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By Harald Malmgren, left, a political economist and chairman of the Cordell Hull Institute think tank, Washington, and Robbin Laird, a co-founder of the Second Line of Defense website and a longtime defense and security analyst.

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