This lecture was held at The Heritage Foundation on September 18, 1998

In a poem about ancient Alexandria, the Greek poet C. P. Cavafy asked: "Why this bewilderment? This sudden confusion? Why are the streets and squares emptying so rapidly, everyone going home lost in thoughts? Because night has fallen, and the barbarians have not come. And some of our men, just in from the border, say there are no barbarians any longer! Now, what is going to happen to us without the barbarians? They were, those people, after all, a kind of solution."²

I am certainly not one of those who is nostalgic for the Cold War. But it must be admitted that the loss of our "barbarians"--the loss of the threat once posed by the Soviet Union--has produced some unexpected challenges for U.S.-European relations.

It is true that predictions of a divorce between Europe and America in the wake of the Soviet collapse were not borne out. The North Atlantic Treaty Organization not only has survived; it has been reorganized and updated. Indeed, a NATO military operation in Bosnia, though not completely successful, has been undertaken with the cooperation of the United States and its allies in Europe.

But it is also true that we Americans and Europeans have changed--perhaps fundamentally. While we continue to have much in common--above all, common values--we find that our differences are growing, and that our common values are sometimes strained by economic and political competition.

There are many transatlantic disputes. There is the ongoing trade dispute over the Helms-Burton Act and the U.S. embargo against Cuba. The United States argues that the embargo is necessary to protest human rights abuses by Castro and to protect American security. The European Union contends that it is a violation of the free trade principles which the U.S. purports to favor and support in the World Trade Organization.

There was the merger of Boeing and McDonnell Douglas. The United States approved the merger of these two aerospace giants as part of the effort to downsize the American defense industry. The Europeans, however, brought an antitrust suit against the merger, which caused much chagrin and concern on both sides of the Atlantic.

After the French sale of Airbus aircraft to China, France softened its opposition in the United Nations to Chinese human rights abuses. This undercut a U.S. effort to encourage the Chinese to sign a U.N. declaration of support for political rights.

And there are the ongoing disputes over Iraq and Iran. The United States continues to favor strong sanctions against Iran. Most Europeans oppose these sanctions, partly for commercial reasons, but also because they disagree with the strategy of containment against Iran. Moreover, most Europeans are reluctant to see military force used against Iraq to force Saddam Hussein to allow U.N. arms inspections to resume. This has caused some consternation in the U.S., particularly in the Congress.

Disputes over multilateral organizations and international law are growing. Recently, the United States refused to sign a protocol calling for the establishment of a permanent international criminal court. This caused much conflict and resentment among the European allies--particularly the Germans, which is unusual. U.S. officials went so far as to suggest that further European opposition might threaten America's military commitment to Europe.

Finally, there were the numerous disputes over Bosnia prior to the 1995 Dayton Agreement.

These disputes may appear to be just more of the usual quarrels, but I fear that they are not. I think they reflect a growing rift in transatlantic relations that is often overlooked and downplayed by leaders of the Atlantic alliance.

The cause of this rift is not American unilateralism or European ingratitude. Rather, the cause is largely the result of a tectonic political shift that has taken place in transatlantic relations since the collapse of the Soviet Union--a shift that is the root cause of much of our misunderstanding.

Transatlantic relations during the Cold War were based on a basic strategic bargain, reflected mainly in the Atlantic alliance. In plain terms, Western Europe and America were more or less equal partners in deterring the Soviet Union from attacking and intimidating Europe. Even though the United States, by virtue of its superpower status, was the leader of the alliance and contributed more militarily than did individual NATO members, the U.S. and Western Europe benefited more or less equally from this bargain. There were shared threats, shared interests, and shared values in accomplishing the common goal of securing democracy and deterring aggression in Europe.

Today, that bargain has changed. The main strategic goal of NATO today is not deterrence, although this remains a residual goal, but peacekeeping, crisis management, and conflict prevention. The United States and its European allies do not benefit equally from peacekeeping operations. In fact, not all Europeans benefit equally, as is often evident by the fact that some contribute more than others.

This mismatch of benefits and contributions can be seen in NATO's peacekeeping operation in Bosnia. In the end, it was not possible to mount a successful peacekeeping operation in Bosnia without the United States.

Yet Bosnia is not nearly the same kind or scale of threat to the United States that the Soviet Union once was. The U.S. is still being asked to shoulder a large burden for the security of Europe, even though the magnitude of threat to the United States in Europe is less than it was during the Cold War.

Nor do Americans see the conflicts in Bosnia or even Kosovo as of the same magnitude or importance as threats from Iraq, Iran, or North Korea. These are threats to America's vital interests, much as the Soviet Union once was. These countries are seen as enemies that would greatly harm the United States if given a chance, which is not really the case for Serbia.

This situation breeds some resentment inside the United States. Some Americans ask why they must assume such a heavy burden in keeping the peace in Bosnia while some Europeans are reluctant to back a tougher policy against Iran and Iraq, for example.

They wonder why America must care so much for Europe's security interests in Bosnia if some Europeans take actions which undercut U.S. security interests in the Gulf and Middle East. While during the Cold War Americans and Europeans debated how to share the burden of defending common goals in "out of area" operations, today we are debating whether we even have such common goals outside of Europe.

Europeans complain that American leadership has become too heavy-handed and unilateral. They complain of American arrogance. Increasingly, America's attempts to assert its global leadership outside of Europe are met in Europe with resentment and even some resistance.

We should understand the introduction of the euro and the common European foreign and defense policy in this context.

Few would dispute the fact that a major motivation behind the euro and the common foreign policy is to increase European independence from the United States and to improve the prospects for a more independent global role for Europe. A common European currency that can rival the dollar, it is thought, can not only increase Europe's economic weight in the world, but serve as an economic foundation for a more global political role as well.

But here is the problem: At the same time Europe is trying to assert its independence--through the euro, the common foreign policy, and sometimes even by challenging American policy outside of Europe--it is just as dependent, perhaps even more so, on the United States for resolving its security problems inside Europe.

As I have said, Europe relied heavily on the United States to create a peace agreement in Bosnia. Europe alone was too divided. Bosnia shows that Europe still needs the United States to balance its divisions inside the NATO alliance.

What is more, Europe alone is not really ready for a common foreign policy. The machinery for creating one remains very limited because Europeans are reluctant to relinquish national sovereignty over foreign policy to a common European body.

A sign of Europe's continuing and perhaps even increasing dependence on America for security can be seen in the area of military preparedness. Europe is getting out of the business of conventional military defense. European governments are slashing their defense budgets and downgrading their military capabilities--far faster than America is doing. Before long, the United States will be the only NATO ally capable of mounting a major conventional or expeditionary force.

It is this contradiction that contains the central weakness of the new strategic bargain. It is as if Europe is heading at full speed in two opposite directions: one direction toward unification and independence and the other toward becoming even more dependent on the United States for its security.

As for the United States, at the same time Washington is downgrading its own military capabilities and objectives, it must continue its relatively high level of military commitment to Europe along with other commitments in the Middle East, Asia, and elsewhere.

I wonder whether this situation can be sustained. So long as the threats are relatively low and manageable, I suppose it can. But I fear that this contradiction may become unbearable if Americans perceive Europe's efforts to build its own identity as somehow responsible for some severe setback or defeat by the United States, say, in the Persian Gulf.

If this were to happen, the weaknesses of the new strategic bargain would be exposed for all to see. Americans would view Europeans as free riders who undermine American security when it serves their interest. Europeans, resentful of U.S. heavy-handedness, could challenge U.S. policy around the globe with greater intensity.

As you can see, the U.S.-European relationship, for all of its longevity and depth, has a built-in instability--a sort of hidden time bomb. Yes, we have a long history of common action, interests, and values that cannot be denied. But I am concerned that we have grown complacent, particularly in light of the fact that we are entering a difficult time that may test our goodwill and commitment.

We are entering a period in which we face a number of difficult challenges. I see four of these:

1. The weakened credibility of President Clinton Whether he faces impeachment or censure, President Clinton cannot fully recover his credibility. This situation will have a significant impact on America's ability to lead--in NATO, in the global economic crisis, in the Russian crisis, terrorism, Iraq, North Korea, and a host of other world problems. In this leadership vacuum, problems will go unattended and probably get worse.

2. Dealing with the fallout of the global economic crisis and the introduction of the euro
   So far, the United States and Europe have been relatively safe havens from global economic problems. But as the economic downturn spreads to Latin America, it may affect the U.S. economy adversely. And Europe is exposed as well to the economic meltdown in Russia, more so than is the United States. Both Europe and America are exposed in Asia. If the U.S. and European economies go into recession, new tensions certainly will arise over trade and economic policy. A worldwide recession would not be a good atmosphere for introducing the euro.

3. Crisis in Russia
   The appointment of Prime Minister Yevgeny Primakov is not good news for the U.S.-European relationship. Primakov's anti-American proclivities will lead him to challenge the United States more aggressively. This may put the U.S. at odds with European allies who may want a more accommodating response to Russia. The likelihood of greater American and Russian estrangement does not bode well for U.S.-European relations.

4. Dealing with Iraq
   The allied coalition that defeated Saddam Hussein and committed itself to preventing him from acquiring weapons of mass destruction is dead. A significant cause of this Western failure is the inability of the U.S. and its European allies to agree on a concerted and decisive action against Saddam's transgressions. If Saddam is able to resume building his weapons of mass destruction, some Americans may blame those European allies who lobbied against military retaliation and for relaxing sanctions against Saddam. The Iraqi dictator has driven a wedge into the Atlantic alliance. This wedge could be driven even deeper in the future.

While all of this sounds a bit pessimistic, I must add that it is not inevitable that these challenges break or even weaken the Atlantic alliance. We all know that there is a deep reservoir of common interest, sympathy, and understanding which has enabled us to weather past storms and can help us through future turbulence.

But we must not sit by and assume that these interests or sympathies alone will keep us together. We must admit that the strategic environment has changed and that new approaches will be needed to sustain our relationship. In this vein, I would recommend the following:

• As a long-range matter, we need to find a better balance between burden and interests--between contributions and benefits in the area of international security
  If we do not find this balance, resentments and misunderstandings are bound to grow.

As part of this effort, I would hope that Europe comes to understand better the implications and requirements of America's global role as a defender of freedom, security, and stability. Most Europeans accept this goal in principle, but there is still a tendency to think that American power is too great, that it can be taken for granted, and that it should be constrained by the United Nations and other multilateral organizations.

It would not serve Europe's long-range interests well if the United States were to become little more than a subcontractor or executor of decisions by the United Nations. Much of the will and stamina which America musters to shoulder the burden of global leadership rests on its own perceived moral authority as a leader of the West. Hamstringing and weakening U.S. global leadership by insisting on U.N. mandates for every overseas military operation or other multilateral action could undermine the will of the United States to lead.

• We must look for ways to enhance economic ties and reduce economic conflict
  We need to be better prepared for the coming of the euro. We need to avoid surprises, and find ways to smooth the transition and reduce misunderstandings.

I like the idea of a transatlantic free trade area, but it may be a bridge too far at the moment. In the meantime, we should encourage the European Commission and U.S. to take the 1995 New Transatlantic Agenda more seriously. We should build on the Transatlantic Market Place Agreement to remove remaining barriers to trade, services, and investment.

The European Union has been absorbed by the euro and by questions of expanding the EU to the east, but if the transatlantic economic link is neglected too much, disputes may become even more common. Neglect of the transatlantic economic relationship, when combined with tensions created by the introduction of the euro, under certain circumstances could even result in a trade war.

CONCLUSION

These steps would minimize the dangers of misunderstanding. But they would do something more. They would also emphasize what America and Europe still have in common--a belief not only in the common benefits of the free market, but in the need to defend the values of freedom and democracy worldwide. Regardless of the end of the Cold War, these are goals still worthy of a great alliance. But to meet them, they require a recognition that a new strategic bargain is needed to reach our common goals.

--Kim R. Holmesis Vice President of Foreign and Defense Policy Studies and Director of the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.