After the Cold War, Europeans believed they were creating a world of rules with their continent at the centre. And now in the time of Covid-19 they find themselves challenged on both of these dimensions. The way that China and America have weaponized the pandemic and global institutions such as the World Health Organization (WHO) to compete with one another rather than to solve global problems demonstrates the shift from the dream of a rule-based order to the reality of great power competition. But an even bigger challenge comes from the fact that the central front for global geopolitics is now in Asia, while Europe has been relegated to the periphery, with its members squeezed between two poles. As the USA and China focus on control of the Indo-Pacific, they are less likely to take European interests into account. It is not simply that Europeans will find themselves increasingly “home alone”, they could also see their interests traded off in a bigger play for global power.
Crises of interdependence take on an entirely new form in an era of Great Power competition that is not focused on the European continent. In place of a rule-based order, Europeans are surrounded by a quadrangle of chaos as the USA, China, Russia, and Turkey each undermine the foundations of the system. Europe’s closest economic and security partners are now also “systemic disruptors”. At both the global and regional level, Europeans find their world disrupted by a mix of ideological rivals and allies gone rogue. Rather than seeing global and regional order as mutually reinforcing, the two will increasingly be in conflict – representing a “double bind” for Europe’s elites.
The road to this geopolitical awakening has been a long one, but Covid-19 has forced EU governments to confront a double shock to their world view, a philosophical crisis which arguably began at the turn of the century, overlaid by a geographical one that crystallised with Donald Trump’s election in 2016. The audacious size of the European recovery plan – with countries such as Germany willing to confront their taboos – shows that Europeans feel the world is changing, and that they need to change with it. The challenge now facing European leaders is that it is much easier to spend money than it is to confront one’s core ideas about the shape of the world.
In Europe, the major geopolitical questions are always German questions in disguise. For the last 30 years the EU has been held together by German glue and Berlin has been the biggest supporter of the status-quo, even as it was gradually undermined by other powers. The logic of the “Wirtschaftswunder” is that if you build good machines, the market will take care of the rest. And Germany, which has relinquished national military options, now finds itself doubly overwhelmed by philosophical and geopolitical crises. The Federal Republic built its economic and political revival as well as its security on a move from the jungle to law, and it's deep relations with the United States. But paradoxically, it is Germany’s exposure to the current global pandemic that could actually equip the country to provide an answer for Europe.
The Twin Shocks to Europe’s system
The Covid-19 crisis struck against an international and European order, which was already in a state of crisis. And as the pandemic spread across the world, it reinforced the two shocks to Europe’s order.
In the early days of Covid-19 the philosophical shock was as present in the EU as outside: it was clear that none of the great powers were looking to the multilateral system to provide an answer. As the death count rose, every country acted as if it was on its own, closing borders, stockpiling medical equipment, and introducing export controls. The blame game conducted by Beijing and Washington over the WHO showed how geopolitics is increasingly undermining multilateralism. Although both China and the USA have long been hesitant about surrendering their sovereignty to international law, there has been a qualitative shift in recent years making Europeans increasingly fearful about the future of the global economy. Covid-19 has added urgency to pre-existing questions about cross-border labour flows, global supply chains, and to some extent even global travel and tourism, leading many to predict that the effects of the pandemic will remake globalisation. Further, tensions around stockpiles and vaccine nationalism amplified a debate about the vulnerability of supply chains that began with the technology war between the US and China before the crisis. The tense debate strengthened fears that China and the USA will increasingly weaponize interdependence and instrumentalize the multilateral and legal order.
Europeans have looked on in horror while their two biggest trading partners - China and the USA - have gone from being advocates for globalisation to “decouplers” in chief. Indeed, the most important structural feature of our world is not the multilateralism Europeans dreamed of, but rather a competition between China and America, the EU’s two most important economic partners. As a result, the nature of globalisation is changing. Neither China nor America wants a conventional war; their most powerful weapons used are to manipulate the architecture of globalisation. In both the USA and China geoeconomics and geopolitics are merging. Increasingly, the USA is politicising what many consider global public goods: the USA financial system, SWIFT, the WTO, the internet, the International Monetary Fund (IMF). And the Chinese are using investments strategically, manipulating markets through state aid as well as undermining the EU’s global voice by undermining multilateral institutions and under-cutting the EU in third countries. Rather than being a barrier to conflict, interdependence is increasingly being weaponized.
The European economic model is based on legal security and the idea of an external body ensuring the writ of the law is enforced (whether through international organizations like the WTO in trade disputes or the US Navy in securing international trade routes). If legal security no longer exists, and if Europeans can no longer rely on secure trade routes, for example, this calls into question the basis of their prosperity as well as their power (the EU’s economic clout is, after all, the precondition for its status as a regulatory superpower). And for policy makers in Brussels, Berlin, and Paris, there is an additional fear that attacks on the rule of law by Trump, Xi, and Putin are reinforcing another threat that is closer to home, namely the erosion of the rule of law within European member states such as Poland and Hungary.
The second shock to the European system which Covid-19 reinforced is Europe’s relegation to the periphery. During the Cold War and in its aftermath, the Global order and the European order seemed to reinforce one another. There was a sense of a Western community of values underpinned by Europe’s status as the front-line and prize in the USA-Soviet global competition. That status meant, for reasons well beyond the cultural connection, that the USA was always solicitous of European concerns. Somewhere between 9/11 and the Covid-19 crisis, Europe stopped being the center of global politics.
There were, to be sure, many clues of Europe’s provincialisation during the Obama administration. For example, in the 2009 Copenhagen climate conference where Europeans - who had thought of themselves as leaders on climate change - were not invited to the meeting President Obama organised with China, India, Brazil and South Africa to hammer out a deal. Another was President Obama’s so-called “pivot to Asia”. America’s readiness to take a back seat to Europeans on the management of the crises in Ukraine and Libya were also notable – as was President Obama’s willingness to pull back from intervening in Syria in 2015. On all of these crises it was clear that the USA was more interested in the impact on American politics and Washington’s ability to pivot resources to Asia than to the impact on European security – whether through the pressure of refugee flows or Russian assertiveness. Although this shift was subtle under Obama, it became inescapable with the election of Donald Trump in 2016. Even though Trump has actually increased America’s spending on European security, he is explicit both about the priority of America’s competition with China over any other issue as well as his ambivalence about being the main supplier of European security. As the USA tries to rebuild after an awful crisis, it will have even less bandwidth for European interests. The Chinese have also tried to use the global pandemic to enhance their influence on Europe through bullying Europeans to adopt Huawei, allow Chinese companies to acquire EU tech, or soften their stance on political issues.  Their willingness to risk long term relationships for short term gains suggests that China sees Europe as a secondary player in the new bipolar competition, rather than a key relationship to be nurtured.
As competition with China has refocused USA attention away from European issues, Russia and Turkey have often used this opportunity to fill the vacuum and push against the policies and principles advanced by Europeans in the Balkans, Eastern Europe, the Middle East, and North Africa. And they are likely to continue doing so, both because they have been quite successful so far and because it could be an opportunity to deflect political attention from the economic impact of Covid-19. In the 1990s, the assumption was that the two big non-Western countries, Russia and Turkey, could over time be accommodated into Europe´s regional security structure, with NATO and the EU as its main pillars. But over the last decade the dream of a unipolar Europe has given way to the reality of a multipolar continent in which Russia and Turkey are gradually reshaping the European security order. Both countries have had a tortured love-hate relationship with Europe during their long period of modernization spanning three centuries. Their leaders share a disdain for EU norms and values and are self-consciously promoting an alternative style of governance.
Russia’s challenge to the order has been well-documented through the wars in the Balkans, Georgia, Ukraine, and Syria, and with the Collective Security Treaty Organisation mirroring NATO and the Eurasian Economic Union challenging the EU. Although the USA has nominally supported the post-Cold War security order, it has contributed ever fewer resources to each new crisis that erupted. Although it has invested in bilateral ties with Eastern Europe, the Trump administration recently cut funding for the European Reassurance Initiative and European security generally in order to fund Trump’s border wall construction. Trump also announced a significant troop withdrawal from Germany and the relocation of EUCOM. Moreover, Trump’s stance on European security issues has rarely been a product of joint consultations. In the Balkans, talks between Serbia and Kosovo were not aligned with European mediation efforts. In Ukraine, some Europeans worried that arming Kyiv might not contribute to de-escalation, while others were unnerved by the way the Trump administration made military assistance conditional on USA domestic political priorities.
Turkey’s emancipation from NATO and the EU has gathered pace since the Iraq war in 2003. Erdogan has tried to get involved in EU politics by weaponising migratory flows and reaching out to Europe’s Turkish diaspora.He has been ploughing his own furrow in Syria, Northern Iraq, the Balkans, and Libya – as well as toying with new relationships with Moscow and Beijing. Recently discovered gas fields further escalated old and new conflict lines in the Eastern Mediterranean, where Turkey assertively pursues its territorial claims and in the process clashes with fellow NATO members such as France and Greece. In spite of being a NATO ally, Turkey has decided to buy the Russian-made S-400 missile system instead of American patriots. The USA has not succeeded in blocking this move. Nor has it shown interest in managing the flows of refugees, in preventing European foreign fighters from returning to Europe, or stabilising Libya. Typically, the USA has left Europeans to fend for themselves in their efforts to engage with Ankara on these issues.
Some Europeans would be happy for Russia and Turkey – together with regional players like Iran and Saudi Arabia - to take over management of the Middle East from the United States, so long as energy flows and a lid is kept on terrorism and migration. But European interests are far less aligned with the interests of these powers than they are with those of the United States. Russia and Turkey have shown a disregard for human rights which has contributed to radicalising the population and driving refugee flows.
As the unipolar European security order has frayed, Europeans have maintained impressive unity in pushing back on Russian aggression and have reorganised their energy markets to reduce its vulnerability to blackmail. In the process they have made themselves much harder targets for Russian aggression. And towards Turkey, the EU negotiated a deal around the refugees in 2016 and then successfully pushed back wheneverTurkey tried to blackmail Europe. However, much of the EU’s approach to the neighbourhood is still centred on the old model of regulatory alignment and association of EU norms. The EU has invested billions in aid and loans in its Eastern and Southern neighbourhoods, hosted summits, beefed up its diplomatic presence, agreed free-trade areas, offered visa-free travel, and linked up neighbours to its energy markets. But during that time, EU influence has been on the decline while Russia has stepped up its pressure through propaganda, information warfare, cyber-attacks, and even military attacks. The EU has talked of promoting the resilience of its neighbours but done little to shore it up in the most sensitive areas. Some EU member states have established security and defence cooperation with Eastern neighbours, but they are fragmented, poorly coordinated and modest. Although there is no consensus on membership for these countries, all EU member states would like to preserve their sovereignty and they will require continued support and security assistance from the EU to maintain a substantial measure of independence from Russia. Moreover, the EU has put itself in a situation where it has very few channels through which to engage diplomatically with Russia and Turkey on regional issues. This lack of strategy has prevented Europeans from becoming real players in regional security as well as exploiting the bubbling tensions between Moscow and Ankara.
These twin shocks – the shift from rules to power and from Europe to Asia – have shaken the foundations of the European conception of order. It would be strategically and morally absurd for Europeans to seek equidistance between their oldest ally with whom they share a fundamental belief in democracy and a rising China that is increasingly trying to make the world safe for authoritarianism. There is a huge shared agenda between Europeans and Americans on everything from protecting human rights in Hong Kong to ending competition-distorting subsidies to Chinese companies. Could China become the new glue for a transatlantic alliance that has been drifting apart? Should Europeans stop aligning themselves with their American allies on this global agenda and instead take more responsibility for regional security in Europe? In the event of a Biden electoral victory, there is an opportunity to reinvent the EU-USA alliance. One can imagine a USA re-commitment to NATO, to the Paris Climate agreement, possibly to the Joint Comprehensive Plan of Action in modified form in exchange for an EU alignment on China that does not ask for complete decoupling and leaves room for diplomacy with China.
Unfortunately, the coming together of the two shocks – philosophical and geographical - will make the process of full alignment with the United States difficult in the medium term. In the past, the plans for regional and global order were mutually reinforcing: Europeans used to see their regional legal order nestled inside the protective shell of an American global security order. It was Western rules that were being promoted at a global level and the United States was a crucial ally in reinforcing the norms for Europe’s regional order. But today there is not just a push-back against both orders. Increasingly, the provincialisation of Europe is bringing the regional and global orders into conflict with one another. Europeans find themselves in a double bind, with the two pulling them in opposite directions.
The EU wants to maintain the current rule-based global order, while the USA is more comfortable with a power-based world, and in any case wants to revise many of the rules to account for China’s manipulation of the existing system. In order to prepare for a more competitive relationship with Beijing, Washington is increasingly rejecting rules which it feels constrain the USA while giving China a relatively free pass. What began with the WTO and the Paris climate deal is now being extended to other areas such as (nuclear) arms control. The USA is interested in negotiating new agreements with China included, but if that is impossible, it refuses to be bound by the old agreements.
Europeans, on the other hand, would also be happy to rewrite many of these rules but would prefer to maintain the status quo than face growing lawlessness. The rise of unilateral sanctions, tariffs, trade wars, tech wars, regulatory barriers and competition-distorting subsidies – coupled with the gridlock of global institutions – risks posing a major challenge to Europe’s economic future as well as its security. And Europe’s relegation from being the principal theatre to a peripheral one is also changing the nature of how other powers engage with it on these rules. The recent controversy around Huawei – where European countries have contended with pressures from Beijing and Washington – gave them a sense of what it is like to be peripheral players in someone else’s dispute. It was like the position of African countries in the battle over the regulation of GMOs between the USA and Europe. In fact, the Huawei scandal was less debilitating than the GMO story, as Europeans could rely on Ericsson and Nokia, but in the future they could often see themselves torn between competing hyper-powers.
In the months ahead, we could see Europeans being forced to choose between their commitment to upholding the existing norms and institutions and their relationship with the USA on security (arms control), on the economy (trade rules), on technology (5G, semiconductors, etc), and on climate negotiations. And that is before we get to the question of military primacy in the Indo-Pacific. Some member states would be comfortable supporting the USA unconditionally on geostrategic issues in Asia, providing that the commitment is only symbolic. But the increasing number of economic battles is likely to make decoupling very costly for Europeans if they are forced to unravel supply chains or choose between their top non-European markets.
The American offer to Europe is fundamentally changing as a result. Increasingly, the USA expects Europeans to take lead responsibility for their own regional security, while following an American lead on how to engage with China. Washington is willing to do less than ever to uphold Europe’s regional security in exchange for ever more expensive contributions to shoring up the USA in its competition with China at a global level. Moreover, there is less overlap in interests and much less concern in Washington for accommodating Europe’s views than during the Cold War and its immediate aftermath. There are many reasons that Germany should not pursue its Nord-stream 2 pipeline, but few Europeans will be comfortable seeing the USA congress deciding whether it should go ahead (and the fact that the sanctions introduced against it were supported by Democrats as well as Republicans show that a lack of respect for EU sovereignty is not limited to the current occupant of the White House). Even the most Atlanticist countries have been unnerved by President Trump’s desire to build closer links with Vladimir Putin coupled with his willingness to disregard the opinions of allies in the European neighbourhood such as the Ukrainian government or the Kurds in Syria. It is not just that the USA is willing to trade off European security concerns against its global agenda, it is the fact that Washington is not even consulting Europeans on these trade-offs. This is what Emmanuel Macron complained about in his famous comments about the “Brain death of NATO”. “We need to reappropriate our neighbourhood policy”, he argued, “we cannot let it be managed by third parties who do not share the same interests”.
The American election in November has the potential to be a game-changer in terms of the philosophy of the White House and the ability of Europeans to work with Americans. A new transatlantic bargain may still be struck that holds the regional and global aspirations together, if only for a few more years. But the election of a new president will not change the long-term geographical shift in American priorities or end the American public’s attachment to national sovereignty or its fear of over-extension. Even a Biden administration will need to trade off the perspective of Europeans with other priorities such as its key partners in the Indo-Pacific such as Japan, India, and Australia, which means that Europeans could find themselves in the role of policy-takers rather than makers on many issues that are central to their economic and security future. Behind Macron’s controversial statement about NATO lies a fear that is shared in private by many European leaders: in the place of a unipolar, Euro-centric rule-based order, we have the prospect of a quadrangle of chaos in which the China, United States, Russia, and Turkey are increasingly pushing back against the European rules.
A New German Answer?
European freedom of action is constrained by many factors. In the neighbourhood, Russia sows disinformation, disrupts politics, and fights proxy wars. Turkey instrumentalises migration and pursues its own policies in the Balkans, Syria, Iraq, Libya and the Eastern Mediterranean. And on the global stage, China and the USA are changing the rules of our economic and security order. China is increasingly assertive in multilateral organisations, is trying to set the rules for new technologies and uses infrastructure and strategic investments to spread its influence while shutting Europeans out of key markets. More painfully, the Trump administration has shown a willingness to leverage the centrality of the dollar and even the transatlantic alliance to restrict European sovereignty in areas where European and American policies differ.
In this new world, Europeans are increasingly finding that key decisions affecting their future are taken elsewhere. Increasingly, the logic for these decisions is one of power rather than following established rules. And because Europe is not seen as central to the interests of other players, the opinions of Europeans count less than they used to. This is creating a crisis of European sovereignty. For most of the last few decades, the biggest problem of sovereignty in Europe was how to tame it. The rivalries between different nationalisms had laid the continent to waste. But now the core challenge is how to get sovereignty back.
The lack of sovereignty over its affairs is increasingly costly for Europe. The American approach of maximum pressure on Iran has cost European companies such as TOTAL and Airbus millions of euros and now the US administration and Congress are looking to expand this approach to other parts of the world. House Republicans are calling for Russia to get kicked off of SWIFT and for China to be excluded from financial services. If the US treated European trade with Russia or China like it has treated Iran trade, it would put at risk €191 billion per year for Russia and €1 billion per day forChina. Europe's cyber vulnerabilities already cost €400 billion a year. Artificial intelligence (AI) will contribute more than €13 trillion to the global economy by 2030, but Europeans do not treat this industry as a geopolitical asset, so others will likely seize it.  And that is before one looks at the costs in lives and security from pandemics like Covid-19 – not to mention security threats like those from Russia.
It is widely argued that we are again in a world of power politics where rules do not count. The EU still has the market power, defence spending, and diplomatic heft to end its vulnerability and restore the sovereignty of its member states. But, unless it acts soon, as the German Foreign Minister Heiko Maas has claimed, Europe may become the chessboard in a new power competition, rather than a player that protects its values.
The reason that Maas has been talking in such dramatic language is that Germany is feeling the pressure of systemic challenges the most. Its economy is the most vulnerable to a breakdown in global free trade. On the spectrum between power and law, Germany is further to the “law end” of this spectrum philosophically than any other country.  And its relationship with each of the four great system disruptors is central to its identity. The USA has been Germany’s great inspiration and protector. Russian history has been entwined with Germany’s through the darkest moments as well as its brightest ones. China is central to Germany’s role as “Exportweltmeister”. And Turkey is key to its reinvention as a multicultural nation. Unlike France or even the UK that can turn to their pasts of geopolitical success for inspiration, Berlin has no blueprint for a world of power politics and now finds itself at a loss.
For the last 30 years the German question has been a debate within the Berlin elite about how to become “normal”. By normal, most people meant some kind of mix of the hegemonic responsibility of the USA, the Western orientation of the British, and the willingness to intervene militarily of the French. In late 2020, six months into the Covid-19-era and 30 years after the end of the Cold War, none of these “normal powers” seems to provide a model anymore.
Donald Trump’s America is seen by many as a broken hegemon. His response to Covid-19 has done enormous damage to USA credibility. His treatment of allies has raised questions about the reliability of the USA as a partner, given the unpredictability of President Trump’s domestic politics. Moreover, the long shadow of America’s interventions in the Middle East have raised questions about the effectiveness of American policy and have also sapped public support for external commitments.
The UK post-Brexit has lost its traditional Western vocation and is searching for a new identity. Like the USA, its reputation has been damaged by its Covid-19 policies. It is an inventive country and could be a partner on many issues from Iran to the Balkans, but it is introverted at the moment and not exactly a model for Germany.
France, with its focus on strategic autonomy and military engagement, seems a more promising model as well as a key partner. The Franco-German unity in the recovery plan was a model for European co-operation. But France’s growing polarisation and Euroscepticism undermine its dynamic president’s credibility abroad. Moreover, Paris’s foreign and security policies have a mixed record in the European neighbourhood. Its war on terror seems to have created disorder abroad and terrorists at home. Its historical neglect of Eastern Europe has made it harder to be a consensus-builder within the EU. And its personalised campaign against Turkey can be seen as counter-productive.
Although Turkey and Russia have shown that a more traditional geopolitical approach can help restore a country’s prominence on the world stage in the short run, they also show its limits. Military interventions always risk going wrong as Russia in Ukraine, Saudi Arabia in Yemen and the USA found in its forever wars. Further, they cannot, in the long run, compensate for a country’s economic decline.
We are not living in a post-Cold War world anymore. The nature of wars in today's interconnected world is different. We increasingly have trade and data wars. Tanks are less relevant for an effective power projection. The multilateral order is hollowed out and Europe needs to find new answers to the great power competition between China and the USA. In dealing with the new world, Europeans do not need Germany to be a less convincing version of France or the UK but rather to put its impressive resources behind a more 21st century version of geopolitics.
In that sense, the exceptionalism of focusing on economics and relationship-building may be of more use than a so-called “normal Germany” that sends its troops to far-off countries and only talks to Western powers. In the post-pandemic world, power will increasingly be challenged by economic might rather than military power, the ability to foster pragmatic relations with neighbouring powers, and to face East as well as West within the EU. All of those assets are more available to Germany than France or any other player in the EU. The big question is whether Germany has the confidence to become the best version of its post-War self – and if other European countries will come with it. In order to do that Germany needs to help Europe reinvent its approach across three levels: intellectual, diplomatic and institutional. In the run-up to the September 2021 elections, it will be essential to have a broader public debate about these three dimensions to create a mandate for a new chancellor who will have to fill the big shoes that Merkel leaves behind.
First, the intellectual challenge is to move away from thinking about geopolitics as a space for permanent alliances and institutions in support of EU values and interests. Increasingly, Europeans will need to see the values as permanent but recognise geopolitics as a space for shifting, temporary alignments in support of them (including with powers that do not share those values). While the transatlantic alliance will continue to be central to Europe, and it would be unwise and unrealistic to do anything to undermine it, Europeans will need to recognise that its future health will depend more and more on Europeans’ ability to show that they are taking more responsibility for their own affairs. Faced with the double shock to their security system, Europeans both need to work out how to find allies to support a rule-based order and how to uphold the rules when they cannot rely on courts (as they have done successfully on the global health challenge in recent months). One aspect of that will be to try to craft a revived transatlantic partnership with the new USA administration if Biden wins the elections. His foreign policy advisors promise to return to the Paris Climate deal and diplomacy on Iran, but there will still be challenges on trade and digital issues as well as a difference of priorities. And, in spite of the presence of a few very like-minded powers like Japan, Canada, and South Korea, Europeans will not be able to relay on a single “alliance of multilateralism”. Instead, Europeans will need to work out a flexible set of relationships with a shifting cast of other powers on different issues.
As a country with unique relations with the USA and a strong commitment to the international system, Germany will find it difficult to go through this new geopolitical awakening. But this intellectual emancipation will demand a less brutal rethink of Germany’s post-war role than becoming a so-called “normal power” that matches French and British military spending and routinely sends its troops to fight expeditionary wars. In that sense, the goal is not to go back to a 19th century version of geopolitics but rather to pioneer a 21st century version. The goal is to be alert to the realities of power but to see that it is not just about control of the land and sea but rather about control over the infrastructure of our interdependent world. In this world, consortia of middle powers can work through institutions, rules, and alliances with companies to shape the world. Moreover, if it succeeds in reimaging its role in the world Germany will be in a good position to help the rest of the EU make a shift.
Second, Europeans need to take more diplomatic responsibility for their regional security order. In this context, Germany could inspire Europeans to craft a new European security order – and a way to handle Russia and Turkey – that includes a mix of deterrence, decontamination and dialogue drawing on its history of Ostpolitik. This should be done as part of a wider economic and security vision as globalisation changes, and the neighbourhood becomes a focus for shorter supply chains.
The first strand of deterrence will mean building a European pillar in NATO with concrete critical capabilities and a European “level of ambition” in NATO. It will also be vital to increase European forward-basing to tackle Europeans’ credibility problem in Eastern Europe and to develop a pan-European capacity to investigate sources of cyber-attacks. Germany would be well placed to lead on this with its notion of being a “Macht in der Mitte”, a long-standing focus on Eastern Europe and a network of bilateral and unilateral relationships within a NATO framework. By pushing forward on deterrence – and perhaps linking it with the idea of creating a ‘European security council that could include the UK - Germany might also be able to improve its credibility in central and Eastern Europe.
The process of “decontamination” should involve strengthening the resilience of neighbouring countries to pressure from Russia or other players so that they can remain sovereign. In order to do this, Europeans should develop an eastern partnership “security compact” with components on intelligence, cyber, hardware and arms control.
Dialogue – both with Russia and with Turkey – will be most challenging. In spite of various attempts by Angela Merkel and then by Emmanuel Macron, they have not developed any successful channels of communication on shared problems. In Russia, the Macron plan has struggled both because the Russians do not seem inclined to become more co-operative and because many European countries do not trust him to defend their interests. It is clear that if Germany tries to embrace this agenda it will have more credibility to bring other Europeans with it. In fact, it has already taken an early step on mediation with Turkey in the East Med crisis.
Third, Europeans need to completely rethink their institutional approach to upholding order. In recent years, there has been a stultifying debate about increasing military spending and very little focus on what capacity that spending would buy or how the nature of power is changing in today’s world. It is important that the EU includes a military component in its tool box, but its ability to have a muscular foreign policy will depend more on its mindset and its ability to translate other assets into “hard power”. In that context, instead of asking Germany to fulfil the 2% goal, the rest of the EU should ask Germany to weaponise the other 98% of its economy and put its trading power at the service of Europe’s strategic goals.
After Russia’s annexation of Crimea, Germany orchestrated EU sanctions and thereby enabled a unified and strong European answer towards Russia. When negotiating the Turkey deal on migration, Germany understood to use the economic power of the EU as leverage. The challenge now is to use this economic heft to protect the idea of an open and rule-based economy. In the economic realm, Germany needs to help Europe develop the ability to fight back against secondary sanctions. Some ideas being discussed in European Council for Foreign Relations’ (ECFR) economic coercion task force include a public European Export Bank to facilitate trade with difficult regions, using digital currencies for more freedom of action in the face of financial sanctions and rebalancing the market-distorting effect of extraterritorial measures through penalties on third country companies on the EU market.
The EU also needs to introduce geopolitical considerations into its competition policy instruments, establish Union-wide foreign investment screening, and expand regulation of state aid beyond EU companies. For the longer term the EU needs to bolster the Euro’s international role by fostering deep and integrated capital and banking markets, developing a eurozone safe asset, extending swap lines to partner central banks as well as working to make the Euro a more attractive digital currency. Across Europe, people recognise that, if a Sino-American trade and technology war jeopardised globalisation, greater European unity – including in the form of the EU’s proposed recovery plan – offers the best hope of safeguarding their economies and values. Rather than preaching the merits of a greener economy, Europe can set a price for carbon and use border-adjustment taxes to persuade others to meet its standards or absorb the costs. Likewise, the EU’s digital agenda and plans for a digital-services tax may yet force global tech giants to abide by European rules.
In some areas, the EU may want to limit its dependence on others or make it less one-sided, but on most issues, European autonomy is not possible or even desirable. European sovereignty should mean being able to decide for ourselves and bargain effectively within an interdependent system through credible counter-threats against hostile actions and attempts to weaponize the global system. The overarching goal should be to preserve, rather than undermine, the rule-based order. But, as we have discovered on trade, the best way to prevent other countries from introducing tariffs or undermining global rules is by having the ability to make it costly for them to do this through counter-measures. This approach must be extended to all aspects of our economic agenda from sanctions and finance to taxation and competition policy. The foundation for external sovereignty is Europe’s internal solidarity, a realisation that led Angela Merkel and Emmanuel Macron to put together the EU recovery plan. The creation of the Recovery Fund could and should be a model for a new German role, but there is a danger that this results in a one-off event. Many noted how several EU partners used their vetoes to squeeze resources out of Berlin. But, no matter how costly the recovery plan and European sovereignty will be for German coffers in the short-term, it will be dwarfed by the economic costs of a break-down of the EU or facing US and Chinese economic unilateralism alone in the longer-term.
The overall goal is to promote a Europe that can prosper and maintain its sovereignty in a world of geopolitical competition. This requires recognising that, even as Europeans continue to support a rule-based multilateral order and the transatlantic alliance, they also need to respond to the interlinked security and economic challenges that other powerful states present. Related to this is the importance of internal EU “enforcement” of democratic procedures and rule of law in its own member states.The values and interests of Europe’s citizens depend upon it.
National governments and Brussels-based EU institutions realise that the Covid-19 crisis has created an opening for stronger collective European action. A major ECFR poll shows that the absence of EU help for member states during the first phase of the crisis has led to an overwhelming demand for concerted EU action – both to help countries recover from the crisis and to equip them to survive in the world the pandemic is creating. Some 63% of all respondents (including a majority in each of the nine surveyed countries) think that the current crisis has shown the need for more cooperation at the EU level.
Before the pandemic, European politics often seemed to be defined by opposing camps of nationalists and globalists. But ECFR’s polling suggests that the Covid-19 crisis has blurred the distinction between the two. Many nationalists have come to realise that a nation state cannot rescue itself by standing alone, while globalists increasingly recognise that there will never be a perfect international order while Trump, Russian President Putin, and Chinese President Xi are in power. As a result, both groups are increasingly exploring the possibility of preserving Europe as a rule-based subsystem while learning to compete in the more anarchic world outside its borders. Because neither nationalist retrenchment nor global cooperation will help to avert the next crisis, a new space for finding European solutions is opening up.
European policymakers must understand that the demands of voters across the continent for greater cooperation do not reflect an appetite for institution-building, but rather a deeper anxiety about losing control in a perilous world. Faced with a double-shock to the European system, the EU has become a community of necessity rather than choice. And voters increasingly see it as a tool to strengthen, rather than weaken, national sovereignty. The European recovery plan, agreed in July, could mark the start of a crucial new chapter of the European story. The fact that Germany was willing to give up on some of its former taboos on mutual debt was necessary in order to reach a consensus on the recovery plan. But to change Europe’s geopolitical predicament will also demand a revolution in how the resources are used. If that happens, Europe will move from having a German question to a German answer.
I warmly thank Shalini Randeria, Ivan Krastev, and Ivan Vejvoda for inviting me to join IWM’s distinguished and thoughtful community. This essay would not have been possible without the stimulating discussions, comments, and brilliant ideas fostered with my ECFR colleagues Jonathan Hackenbroich, Lucie Haupenthal, Janka Oertel, Jana Puglierin, Jeremy Shapiro, and Vessela Tcherneva. I am very grateful to Adam Lury who introduced the concept of the “double bind.”. Thomas Bagger, Christoph Bertram, Ralf Beste, Thorsten Benner, Franziska Brantner, Sebastian Groth and Stefan Mair read drafts of the paper and immeasurably improved it with their brilliant comments.
 Small, Andrew, “The Meaning of Systemic Rivalry: Europe and China beyond the Pandeemic”, ECFR May 2020
The article gives the views of the author, not the position of ‘Europe’s Futures – Ideas for Action’ project or the Institute for Human Sciences (IWM).