How to revitalize the US-European partnership
Europe is excited about Obama, but worried about bearing US burdens.
(Page 2 of 2)
We need to find a better balance between diplomacy and sanctions on Iran and make more progress toward enabling the Afghans to put their own house in order.Skip to next paragraph
Subscribe Today to the Monitor
Together, we must think through ways to positively engage Russia as a provider of energy supplies and necessary partner for the solution of international conflicts, while at the same time ensuring the independence of countries such as Ukraine by putting a greater emphasis on their close association with the EU.
In the years to come, of course, America's leadership role will depend largely on how Washington deals with the deep financial and economic crisis.
The need for more stringent regulation of financial markets, increased public spending, and other measures to stimulate consumption and bail out troubled industries, while still promoting meaningful investment in the future, are already on the agenda. Expenditures will lead to an even higher public debt.
Thus the US is likely to continue living beyond its means, spending more than it earns and not saving enough. And the Federal Reserve will face intensifying political pressures from Congress and the White House over monetary policy.
Consequently, European leaders worry that the US will shift much of the burden onto the shoulders of its partners, not least by a further competitive devaluation of the dollar and by protectionist legislation. That could create friction not only with China and Japan, but also with the European Central Bank and the EU.
Stability-oriented Germany, the EU's economically most important member state, with its high savings rate, its quite successful efforts at balancing the budget, and a high dependence on free trade, would be particularly affected. No government enjoys being "invited" to help bail out those primarily responsible for a crisis, especially when it faces a crucial election year, as the German government does in 2009.
All this does not mean, however, that Berlin will refuse to contribute its share. In addition to the ¤200 billion package adopted by the EU and its member states as recently as last December, Germany will soon enact a second national stimulus package.
Because of power shifts in our globalized world and because of policy mistakes in recent years, the US role as a global leader has been put into serious question. All of the Western world today suffers the consequences.
It is now up to Obama and EU leaders to revitalize the indispensable partnership with the indispensable leader.
• Dietrich von Kyaw is a retired ambassador and the former permanent representative of Germany to the European Union.