Si vis pacem, para bellum (if you want peace, prepare for war). The famous Latin adage alludes to the strategy of dissuading adversaries from any possible pre-emptive attack by strengthening your own defences. Since Donald Trump begun to sign executive orders as new US president, the aggressive tone of his statements has noticeably increased. Europeans are beginning to realize that something is disturbing transatlantic relations. The European Parliament itself has opposed the eventual appointment by the Trump administration of Ted Malloch as ambassador to the European Union. Malloch is a consultant well-known for his anti-EU stance. He has openly questioned the euro.
Trump’s ambassador to the EU
Some continental politicians had been disturbed by the possibility that Malloch could be finally nominated. To be more accurate in their judgement, perhaps those politicians should have reviewed some of Malloch’s ideas in his book, Davos, Aspen, and Yale: My Life Behind the Elite Curtain As a Global Sherpa. In this text Malloch aims at demonstrating how his Christian faith and spiritual capital have motivated and guided his purpose and higher calling. Certainly, it cannot be said he is a parochial isolationist.
Malloch foresees an abrupt end to the euro. Such discourse is not new and has conveyed the uneasiness expressed by some American and British think tanks about the single currency. Maybe he has been more explicit along the lines of his outspoken presidential mentor. These kinds of unrestrained statements act as effective weapons in the financial markets. Let us remember that the euro, as the second most internationally traded currency, nearly collapsed during the currency crisis of 2010-12. At that time some 200 million people had their currencies linked to the Euro, in addition to some 330 million Europeans from the so-called Eurozone. Global speculation against the euro was mediated as a result of the difficulties of the indebted economies of Ireland, Portugal and Greece, which were finally “rescued”. The fear of a possible contagion spread to other countries such as Spain, Italy, Belgium or even France. Then,
analyses that emphasized the discomfort of the US and the UK with the euro were mostly ignored by mainstream media. Such discomfort is returning full-swing with political claims such as “Make America great again” and “Brexit means Brexit.”
Beyond the façade of economic protectionism, and far from what some observers have interpreted as a withdrawal of the United States from the rest of the world, Trump’s new group of advisors plainly sponsor “Anglobalization”. Trump’s appeals to protectionism against world trade and international economy should not be misunderstood. Nor would it be appropriate to interpret the British government’s desire, after Brexit, as no more than a strategy of self-interest to close its borders so that British jobs can be preserved. Actually both countries are interested in globalization, as long as they get benefits from it.
Indeed, Anglobalization is back if it was ever gone. Major global financial centres continue to be located geographically and culturally in Anglo-Saxon contexts (Wall Street and the City of London), where local currencies are in competition with the euro. Therefore, it is implausible not to conjecture on the pressure exerted by capitals in US dollars and pounds sterling on the euro. As a consequence, those Eurozone member countries hit hardest by the Great Recession continue to pay extra in no small measure because of the valuations of rating agencies and stock exchange operators also located in New York and London. The financing of their public debt has so far been suffocating to say the least. Instead, and with a level of sovereign public borrowing similar to other EU countries, the UK has been able to handle its financial commitments with ease because of the amount of “invisible” capital flowing into the City.
Beyond monetary considerations, the euro can be symbolically regarded as an institutional response to the “American challenge”. Half a century ago, the journalist Jean-Jacques Servan-Schreiber anticipated the danger of subordination represented by the “unstoppable” penetration of goods, ideas and services from the United States. Servan-Schreiber pointed out that the European backlog was not due to a lack of human capital, but to a lack of adaptation to modern methods of management, equipment and research capacity. But, above all, he criticized the lack of European political will and joint action, not only facing the Défi americain but responding to the upcoming challenges emerging from the Asian economies.
The euro in a coordinated Europe
The Euro represents a tangible commitment to the viability of the European political project. In the articulation of an alternative to the Anglo-American model of individual re-commodification, or to the “neo-slavery” practices of social dumping put in place by competitive economies such as those of China or India, the “sovereign” action of the European states is doomed to failure. They could hardly control the impacts of Anglobalization by acting in isolation. Rather, the Anglobalized financial markets can impose the mode, pace and scope for the single European nation-states, whether they like it or not. Even those big European countries most able to articulate individualized strategies (Germany, France or Italy) have in recent decades shown their impotence to implement uncoordinated alternatives.
As has often happened in the past, it may be argued that in the coming economic war the “rule of the strongest” will prevail. A majority of Americans and British may think that “victory” is on their side. Following such a line of argument, Anglobalization can be seen as a threat not only to the euro but to the very survival of the European social model itself.
For Europeans the optimization of added value in their productive systems and the strengthening of social cohesion remain the great challenges to relaunch their political union.
But what is already under attack is the welfare state, a European invention after all. For its preservation and self-defence the euro is very important. External pressures, together with internal difficulties posed by the rising of para-fascist populism, should encourage further Europeanization in an effective manner.
A Spanish version of this article was previously published in Diario Público.
Photo Credits CC Wikipedia
Also published on Medium.