Monday, June 06, 2005

What does "'Non" and "Nee" mean to Asia?

There is a lot of froth around regarding the resounding the "no" votes to the EU constitution. In essense, this means a return to the original, smaller, Western europe project. A Franco-German alliance will gather a few countries such as Spain, (Italy only if Berlucsconi goes) and the Benelux countries. The Euro will eventually become stronger on the back of this powerful group.
British foreign policy has for centuries been all about preventing any single power becoming dominant on the european mainland. The EU could have been the worst of all nightmares since traditional competitors (French & Germans) were looking to act as one. Hence, the enthusiasm to widen the EU to include the Eastern countries, even contemplating Turkey. Being unwieldy, the "Anglo-Saxon" plan, with its very Atlantist orientation, would become a Free Trade Area, jettisoning the social contract and welfare state.
No more shorter working weeks and public transport & health systems.
That explained part of the voting. Despite the triumphalist overtones from the Murdoch owned media, that strategy went too far too soon and has been rejected. If the Eastern European countries are left out of a new "first class" carriage of the main Western economies (or otherwise known as a two-speed Europe), then those on the periphery will lose out. That includes the UK.
Of course, the Nice convention allows things to carry on as usualfor the time being. However, moves are no doubt being made to change the face of Continental politics by the next decade.
By then the US will have been in years of recession as it pays down its debt and the dollar no longer remains the world's reserve currency. Military over-extension, in the search for cheaper reliable energy supplies would add to the toll and produce a popular backlash to neo-con adverturism.
The UK is in similar danger of losing out by trying to have it both ways, while the debt-ridden economy starts to unravels within this new Parliament.

Things could get worse for them though.
Imagine a Franco-German alliance with Russia and by extension, China. In the short term, if the conservative CPD wins in Germany, that may be delayed. But ideas planted today would take five years to bear fruit by which time the Right would be voted out anyway.
The German orientation is the key. Their manufacturers may have benefitted by ditching high cost German workers for Poles at a third of the price. However, this has contributed to the worst economic crisis since the thirties. Big Business may have to return and move even higher up the value chain. Or they could go even further to the East towards Moscow.
Closer links to Russia may prove attractive in becoming top dog in Eurasia. That sets the scene for a head-on confronation (economic for sure) with the US. Russia would dearly love to sell energy at high prices to Europe, lap up German technology and investment and become a modern resurgent economy, and by extention, miltary power to be reckoned with once again. History shows that whenever Russia goes up, German power diminishes. And vice versa. But if history were so linear, no one would have predicted France and Germany working together so soon after three wars (1870 to 1945). So why rule out closer German-Russian links?
If US grand strategy is mainly about controlling Eurasia, it therefore cannot accept what it would see as European meddling. The successes of placing friendly regimes in Ukraine and the Caucusus would be short-lived.

If the US overextends or comes a cropper in Iran and Iraq, it may well be in no position to oppose. A developing vaccum would be too tempting for others to fill.
Western Europe is looking to counterbalance the 60 year dominance of Washington. It also knows that the future points to Asia. The US is peppering the Black Sea and Caspian Sea regions with bases and building pipelines. But will they be able to hold on? I doubt it.
The "Project for a New American Century" recognises the imminent rise of rival powers. Hence the rush. But recognising danger does not always mean you can avoid it.

I am expecting a sea change in five years or so. The French people may have tilted the balance of power for the next decade in ways unforeseen and for far more parochial reasons.
If the European elite can have so arrogantly got it wrong and be so out of touch with their people, why do you suppose that the US has got all so right?
Garrisoning the world does not enhance security. Riding roughshod over European sentiment means that millions are waiting for the giant to stumble.
Oh and there could be another miscalculation. Some zealots may see the No vote as an opportunity to roll back the entire EU project and remove the Euro as a threat to the dollar. If they want to bring the whole house crashing down, that is exactly what they should do. Regardless of short term strength, the days of Dollar supremacy are numbered. The Emperor has no clothes.


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