Trump's Rejection of the EU Could Make It Stronger
Donald Trump is not one to mince words: He says he doesn't care if the European Union breaks up, since it is "basically a vehicle for Germany" and calls the North Atlantic Treaty Organization, Europe's main defense arrangement, "obsolete." With these statements, the next U.S. president drew sharp battle lines: He, U.K. Brexiteers and other euroskeptics on one side and the rest of Europe on the other.
That emerging divide is an unexpected gift for a faction that appeared to be in retreat after Brexit: European federalists. If Trump acts on his opinions, Europe will be faced with the necessity of playing a much more independent geopolitical role. The U.S. will be at best a situational ally, and at worst a competitor. That makes the idea of increasing European unity far easier to sell even to those electorates within the EU that have been skeptical of deepening integration. Few European nations are big enough to face an increasingly dangerous and unpredictable world on their own.
Since its passage last June, Brexit has boosted pro-EU sentiment in most big European nations. The latest Eurobarometer survey conducted by the European Commission shows that, compared with the spring of last year, the number of EU citizens who view life in the bloc positively has increased by a percentage point to 35 percent, while the share of negative views dropped to 25 percent from 27 percent. A slightly higher percentage of Europeans -- 81 percent compared to 79 percent -- now support the freedom of movement, a EU tenet that most irritated Brexiters. A devaluing national currency and the prospect of being locked inside the borders of their home country are dubious enticements.
Brexit, however, hasn't eliminated the strong euroskeptic streaks that exist in countries as diverse as the Netherlands and Italy. While it's clearer now that no country will seek an exit in the immediate future, a loose union in which the nation states play the first fiddle has been almost universally assumed to be in the cards for Europe. German Chancellor Angela Merkel, the leader of the EU's strongest member state, is a supporter of an EU led by nations, not the central bureaucracy in Brussels.
Trump, however, is taking relatively mild post-Brexit concerns to a new level. He keeps insisting that U.S. allies are not paying enough for their security, forcing the U.S. to shoulder too much of the burden. Raising defense spending to NATO's requisite 2 percent of gross domestic product is not an option for most European countries. Only Greece, the U.K., Estonia and Poland hit that mark in 2016, though more small nations will achieve it this year. It's not clear, however, whether even 2 percent is enough for Trump. The U.S. outspends all European NATO members put together almost three-to-one.
What if Trump wants European U.S. allies to spend proportionally to their population or territory? What if, in case of a credible threat, he makes a spur-of-the-moment decision on whom to support militarily -- and whom not to support? This creates a tangible risk that wasn't there before Trump won the U.S. election.
In most EU countries, a strong majority of European Parliament members already supports EU military integration, though the Scandinavian nations and Austria are opposed to setting up a common military headquarters. Trump's opportunism is likely to increase that support, especially in countries close to Russian borders. If politicians whip up a fear of being left defenseless, Europe may even be able to overcome the major problem with deeper military cooperation -- a lack of funding. Brexit is likely to open a gap of 5 billion euros ($5.3 billion) to 17 billion euros in the EU budget (a "harder" Brexit corresponds to a smaller gap because it will increase customs tariff revenue), but a security structure to back up the suddenly less reliable NATO will be seen as essential and worthy of raising additional funds.
Another area in which the EU may want to stick closer together thanks to Trump is trade. In recent months, free trade has been relatively unpopular in Europe. A deal with Canada, many months in preparation, was nearly blown up by the opposition of a regional Belgian legislature. The Transatlantic Trade and Investment Partnership, a pet project of Merkel and U.S. President Barack Obama, is highly unpopular in Germany. But now that Trump is offering a sped-up trade deal to the U.K., Europeans may start worrying about losing competitiveness, and a more proactive trade policy may become a bigger priority than it is today. Though Merkel is still a free trade advocate, the EU as a whole may become more restrictive when it comes to trading with the U.S. and the U.K. while opening up to other countries.
The size of its market -- bigger than the U.S. one -- makes the EU a formidable economic competitor, but a more competitive stance will require moving faster to eliminate the many internal barriers to business that don't exist in the U.S.
In other areas, too, Europeans may need to huddle closer together during the Trump administration. Trump has sounded openly hostile to Merkel, with her "disastrous" refugee policy, and to Germany -- a new reality for Germans who, since the end of World War II, have gotten used to a generally friendly and supportive U.S. Pro-Trump websites single out Merkel for fake stories and conspiracy theories. That may be fine with anti-German, nationalist voters throughout Europe, but Germany is the mainstay of the European economy, and for most EU countries, a good relationship with Berlin is more important than one with Washington. Besides, Trump is highly unpopular throughout the EU. They will be receptive to the message Merkel transmitted after the recent Trump interview: "We Europeans have our fate in our own hands."
Trump provides European federalists with an opportunity to counterattack. One of them, Antonio Tajani, an ally of former Italian Prime Minister Silvio Berlusconi and European Commission President Jean-Claude Juncker, emerged on Tuesday as the winner of a heated race for the European Parliament presidency. Other advocates of closer integration will now raise their heads, too. Calls for more unity, and more European self-confidence, are already heard from the likes of French Foreign Minister Jean-March Ayrault and German Vice Chancellor Sigmar Gabriel, both advocates of a closer-knit EU.
The Age of Trump will not last forever, but he may do enough damage to the U.S. relationship with Europe that Europeans may find it to their benefit to be prepared for similar shocks in the future.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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