Euro shows weakness within our NATO allies

Published 9:00 pm Tuesday, January 15, 2002

BRUSSELS — The introduction of the euro currency in 12 nations on Jan. 1 was supposed to provide Europeans with new confidence about their weight in the world and their ability to forge common institutions. Floating further out on the horizon are an all-European military force and the outline of a European political federation of some sort.

But Europe 2002 has followed Japan and the United States into what is now a dispiriting global recession. New money has not dispelled old problems: High social welfare costs and labor market rigidity have dragged Germany into stagnation and its partners are following Berlin down.

Recession is never welcome. But the timing of the broadest economic slowdown the world has known for decades threatens to become an acute political problem for the 15-nation European Union. The downturn is exposing the fragility of some of the Old Continent’s grand new ambitions.

The Union must scare up resources to fund its plans to admit up to 10 new member states — mostly former Soviet satellites in Central and Eastern Europe that will need economic support — and to concentrate defense spending to reduce dependence on the United States.

And more bills will soon be in the mail. Europe will be pressured by Washington to put up a major share of the roughly $10 billion that will be sought for reconstruction in Afghanistan at a pledging conference in Tokyo later this month. Americans waged a high-tech war in Central Asia and should not be stuck with reconstruction bills — or messy peacekeeping duties — in the view of the Bush administration.

Marginalized in the Afghan campaign by their own military inadequacies and by the Pentagon’s go-it-alone war planners, Europe’s armed forces today see themselves slipping even further behind the United States instead of narrowing the capabilities gap earlier demonstrated in Bosnia and Kosovo. The Europeans risk falling into a second-tier status within the NATO alliance. They would be held in reserve for dangerous but unglamorous missions while Americans wage war with a global reach.

This is a demeaning division of labor that Washington and its European partners must strive to prevent. A political tempest in Italy illustrates how quickly something small can be made into something ominous in this atmosphere.

The resignation of an Italian foreign minister rarely makes waves outside Rome. Entire governments have come and gone with regularity and nonchalance since World War II. But when Renato Ruggiero stepped down last week rather than continue working for Prime Minister Silvio Berlusconi, Europe experienced a tizzy of self-doubt.

Ruggiero’s appointment as foreign minister was forced on Berlusconi after the shady billionaire won Italy’s parliamentary elections last May. Gianni Agnelli of Fiat and other Italian internationalists pushed Ruggiero, the former head of the World Trade Organization, as a voice of reason and international credibility for Berlusconi’s Cabinet.

But Ruggiero is a strong advocate of greater European political and economic integration, a cause Berlusconi openly mocks as being a socialist-inspired plot. Berlusconi sees himself as occupying the same right-of-center political space that President Bush holds in the United States. He openly courts a closer relationship with Americans, even at the expense of Italy’s ties in Europe.

Fed up with Berlusconi’s heckling of the introduction of the euro to replace Italy’s lira, France’s franc and other national currencies, Ruggiero quit. Conspiratorial minds saw a hidden American hand in the foreign minister’s forced resignation and Berlusconi’s taking over the job himself.

There is nothing to that suspicion. And by week’s end, Berlusconi was prompted back on message about the virtues of European unity by former French President Valery Giscard d’Estaing, who flew to Rome and used the mini-flap to burnish his new job as head of the European Union’s advisory council on constitutional organization.

French voters turned Giscard out of the presidential palace in 1981. But he has remained active in reshaping French and European institutions. The job of organizing a high-level discussion on the political future of Europe lasts only a year and has no real executive power. But Giscard has the talent and ambition to use the convention as a platform to show Europe what it is missing by not having a president.

The political genius of Europe in the second half of the 20th century was to spin new webs of economic and political union out of adversity and challenge. The Bush administration must take care to be above suspicion that it is contributing to any effort by Berlusconi, or anyone else, to thwart the current chance for Europe to confront and once again overcome its problems.

Jim Hoagland can be reached at The Washington Post Writers Group, 1150 15th St. NW, Washington, DC 20071-9200 or hoaglandj@washpost.com.