When President George H.W. Bush spoke of a Europe “whole and free” in Mainz on 31 May 1989, it may have looked like a distant pipedream. Yet, by any reasonable metric it became a reality. Yes, it was incomplete. And yes, there were conflicts and the threat of war. But if you told someone in 1989 that 30 years later NATO would consist of 29 members and that Central and Eastern European states would be members of a more integrated European Union that had its own currency and survived the worst financial crisis since the 1930s, you would have been considered wildly optimistic at best.

Despite this success, Europe’s story has not settled on a happy equilibrium of peace and prosperity. As is frequently the case in international politics, a solution to one problem sows the seeds of another. It is thus with modern Europe.

The enlargement and deepening integration of the EU created new fissures and vulnerabilities that led, in turn, to a new debate about the future of the European project. The Union will almost certainly survive— that much is clear from Brexit and the eurozone crisis—but the precise form and orientation of the EU is in question. Over the past 30 years, European politics was dominated by the centre-left and centre-right—they disagreed about tax and spending but agreed on globalisation, the Union, and open societies. Now there is a heterogeneity of ideas that creates a real debate about the future of Europe.

On the other side of the Atlantic, many Americans are rethinking their view of the transatlantic relationship. For all of their differences, the Obama and Trump administrations both expressed concerns about America’s role as the primary provider of security in Europe and both called upon European counties to do more for their own defence. This sentiment appears to have given rise to a smaller movement, led by President Donald Trump, that argues the U.S. should pull back from Europe if the burden- sharing concern is not satisfactorily addressed. Meanwhile, American conservatives are torn on the EU. Trumpists view it as a competitor and want to empower nationalists and populists in Europe. Traditional conservative internationalists continue to see it as a partner and a vital part of the alliance.

One should expect these differences and tensions to continue and deepen in the years to come. The question is what it means for Europe and the future of the alliance. That is the subject of this essay. The first part looks at changes in Europe, the second at changes in the U.S. view of Europe. The third argues that America’s priority must be the maintenance of an open and classically liberal European order that bolsters an international order of free societies.

Europe Rethinks Europe

 The European view of the EU has been transformed by various perceived policy failures over the past 10 years, particularly the 2009 eurozone crisis and the 2015 mass-migration crisis. Both crises weakened the European centre and empowered populists. This is not surprising. Citizens usually are most open to new ideas when the old ideas are perceived to have been discredited.

The 2009 eurozone crisis exposed one of the fault lines in the EU—a one size fits all monetary policy in the absence of a common fiscal or financial policy created divergences that left smaller countries exposed and vulnerable in a time of crisis. Germany reacted by insisting that the liabilities of the banks, which were considerable, were the sole responsibility of their home country, even if other banks (particularly German banks) were partly culpable. Moreover, Germany insisted that the crisis was the result of a moral failing by the debtor nations rather than the inevitable consequence of the structure they had designed. The EU, through the European Central Bank, provided vital assistance to the affected nations but under strict conditionality that the International Monetary Fund considered too severe.

The outcome of the crisis was to reshape politics in Germany and in the debtor nations. German citizens became concerned that the rest of Europe was taking advantage of it. If Germany was not careful, it would be dragged down by the delinquent behaviour of the debtor nations. The German mainstream began to demand severe austerity and restrictions on economic policy while also rebuffing demands that they stimulate demand through increased investment that took advantage of historically low interest rates.

The debtor nations, and other sympathetic actors including  the IMF, came to the view that the German position was self-serving (after all German banks had made many of the bad loans in the first place) and counterproductive. They began to push back, arguing in favour of the mutualisation of liabilities (so that a bank’s bad debts were the responsibility of Europe as a whole), a eurozone-wide banking guarantee, and a more Keynesian approach to economics. The centrist parties that adopted this position in opposition found themselves having to yield to the German view once they were in power. The populists gained as a result but with the exception of Syriza in Greece, none won power during the crisis so they were never put to the test.

The end result of the eurozone crisis was to sow the seeds of mutual suspicion throughout the euro area about other Member States. In Germany, the right and the left became deeply fearful of French-led plans for further integration that they regarded as a way of trapping well-intentioned Germans into being responsible for the sins of others. In the debtor nations, voters worried that if a new crisis emerged they would have no ability to choose policies that might ease the suffering.

Both sides stopped short of advocating exits from the eurozone. German Finance Minister Wolfgang Schäuble considered it in 2015 during the second Greek crisis but was overruled by Chancellor Angela Merkel, who came under pressure from the French, Italians, and Americans. They feared that there was no such thing as a managed exit and it could lead to a second global financial crisis. The debtor nations believed that an exit would result in the immediate and dramatic depreciation of their new currency, which would, in turn, cause the collapse of the banking sector and wipe-out deposit holders, something no government could endure.

The emotions of the eurozone crisis would ease with time but it fundamentally changed the terms of the European debate. The EU was no longer seen as a one-way bet but as a relative sum game in which there were winners and losers between the Member States. It also entrenched a populist movement that positioned itself as the protector of national interests, whether that be as creditors (as in the case of Alternative für Deutschland in Germany) or debtors.

In parallel, the rise of the Brexit movement in the United Kingdom is inextricably linked with the eurozone crisis. Brexit was a fringe concept before the crisis but the perceived failure of the EU’s most important project discredited the Union, particularly amongst conservatives. UKIP, which only garnered less than 3% of the vote prior to 2009, surged, putting pressure on the Conservative Party. The EU was now seen as a failing entity. The left was more supportive but it is very likely that elements of the hard left saw the EU has a nefarious force for austerity and the financial sector after the Greek crisis of 2015.

The second shoe to drop was the mass-migration and refugee crisis in 2015. By 2015, the Syrian civil war had raged for four years but the refugee flow began to increase significantly that year. Middle East nations began to tighten their borders and the worsening conflict in Libya ruled out that country as a viable destination. Europe tried to stop boats at sea and even stopped rescue missions in the hope of deterring migrants. In September 2015, the world was shocked by the death of a 3-year-old Syrian boy named Aylan Kurdi who washed up on a Turkish beach near Bodrum. A picture taken of his body, face down in the sand, shocked the world. The next day, Merkel gave a speech at Bern University promising to take in all Syrian refugees with the famous words “wir schaffen das” (“we can manage this”). Refugees took her at her word and soon they arrived in Germany at the rate of 10,000 a day.

Coming as it did after the eurozone crisis, the centre had already been weakened and populists were poised around Europe. A revanchist Russia was keen to exploit the problems. European institutions were unable to deal with the challenge. Refugees were free to move within the Schengen Zone, which applied to almost all of the continental EU (but significantly not the United Kingdom). The rules governing refugees were covered by the Dublin Agreement, which held that refugees were the responsibility of the EU state they first set foot in—an impossibility given the numbers and the size of the states on the front line. Germany tried to insist that all countries share the burden but found Eastern European leaders quoting back to them the principle established during the eurozone crisis that these liabilities be nationalised. Efforts to introduce Qualified Majority Voting on this matter exacerbated the division—quotas were set but they were not abided by. Several Eastern and Central European countries publicly rebelled against Berlin, believing that Germany was trying to steamroll the wishes of small countries. The result was inertia. If refugees wanted to head to Germany, they would be Germany’s responsibility.

The refugee crisis transformed the politics of Eastern and Central Europe, shifting the mainstream in a restrictionist direction deeply suspicious of German intentions and liberal values. It strengthened the position of Hungarian strongman Viktor Orbán and set the stage for the rise of other populists like Matteo Salvini in Italy. The German debate moved against Merkel and she was compelled to accommodate her critics over time. It provided a new rationale for AfD, which was originally established in response to the eurozone crisis. By 2019, the centre of gravity had moved toward a restrictionist position—even the centre-left in Denmark would take a tougher line on immigration to win power in the 2019 Danish general election.

The net effect of these was to undermine the principles of European integration. In some countries—particularly Hungary—it weakened democracy itself. In all, it legitimised a nationalism that saw intra-EU politics as inherently competitive. This does not mean the EU is close to collapse. The nationalists and populists do not want exit—they now know how hard, indeed impossible, that is. But they do want to change the nature of the EU.

America Rethinks Europe

The United States was deeply involved in all aspects of European politics since World War II, including since the Cold War. The U.S. was instrumental in the enlargement of NATO and the European Union. It took the lead in dealing with the Balkan wars in the 1990s. The U.S. was even involved in the eurozone crisis, making a critical intervention in 2015 to dissuade Germany from forcing Greece out of the eurozone. However, despite this, the beginnings of a rethink first came to the fore during the Obama administration. The president was frustrated with Europe, believing it should do more to tend to and take care of its own interests. He criticized Europe directly on defence spending and strictly limited American involvement in the Libya intervention to create an incentive for France and the UK to do more. He remained committed to the transatlantic alliance but saw America’s strategic future in the Asia-Pacific region.

Trump would radicalise this sentiment. He has a 30-year history of opposition to America’s alliances and defining the national interest in narrow and mercantilist terms. Up until mid-2016, he had said nothing about the EU, although he was explicitly critical of NATO. However, after the Brexit referendum, he began to make common cause with the Eurosceptics, identifying with their underdog, come-from-behind victory. He met Nigel Farage in Mississippi in August of 2016, starting a seemingly genuine friendship that would influence his views on the EU. His choice of Stephen Bannon as campaign manager also had a role to play. After Trump’s election victory, he began to talk about the EU as a competitor of the United States and enquired as to when it would collapse entirely. His views of the EU were wrapped up with his complicated hostility to Germany, which was in turn connected to his father (who was of German origin).

Trump has expressed various views of the EU throughout his presidency. He has veered between outright hostility and acceptance, usually depending on who he spoke to last. President Emmanuel Macron helped moderate his views somewhat. However, over time the trendline was clear—again and again, Trump comes back to the notion of the EU as a competitor to the U.S. He has embraced a hard Brexit, imposed tariffs on the EU, considered the nuclear option of tariffs on automobiles, and rebuffed the EU’s overtures to work together on China, calling the EU “worse than China, only smaller.” He has embraced Orbán and travelled to Poland and spoke of Western civilisation, making clear his preference for nationalists and populists.

Trump’s ambassador to Germany, Ric Grennell, spoke out early in his tenure in support of the populists but pulled back following fierce criticism. Secretary of State Mike Pompeo criticized the EU in a major speech in Brussels in 2018 and Assistant Secretary of State for Europe Wess Mitchell said he saw European integration as a destabilising force as much as a stabilising one, prioritised Eastern Europe over Western Europe, and stopped talking about the erosion of democracy and the rule of law in Hungary. The administration strongly opposed EU proposals for strategic autonomy (PESCO). Nevertheless, the administration has never fully operationalised its Euroscepticism. The EU seemed to deter the U.S. from imposing auto tariffs and Commission President Jean Claude Juncker came to an improbably mutual understanding with Trump.

It is impossible to predict where U.S. policy toward Europe will go, but for the first time since World War II, one can imagine a U.S. approach that seeks to divide the EU, restrict transatlantic trade, and tolerate the erosion of democratic institutions. If a Democratic administration comes to power, it is possible that the matter of burden-sharing will continue to shape American views of Europe, and that the U.S. provision of security will be pared back, particularly when it comes to conflicts in non-NATO countries, whether it be Ukraine or in North Africa.

What’s Next?

 The old rationale in the U.S. approach to Europe is undoubtedly fraying. Europe is changing and the U.S. is growing less interested. Simply recommitting to a Europe whole and free is not enough. It doesn’t address what is happening in the Union and it is unlikely to be enough to keep America engaged. We need to place the transatlantic alliance in a broader context of what is new about our era.

We are witnessing the early stages of a clash of systems between free societies, on the one hand, and authoritarian systems, led by China, on the other. Each of these systems challenges the other not because of the strategic choices they make but because of what they are. The freedom of the press and information, social media, non-governmental organisations, and a truly open global economy threatens the stability of authoritarian regimes by increasing the likelihood of domestic unrest. On the other hand, China’s tools of domestic repression—such as facial recognition powered by artificial intelligence—and its mercantilist economic model pose a real challenge to democratic societies. Even if both systems lacked hostile intent, each by being itself poses a problem for the other. Layered on top of this is emerging geopolitical competition with China in East Asia and with Russia in Europe.

The U.S. and Europe find themselves confronting this authoritarian system in multiple ways—Chinese and Russian money empowers illiberal forces in Europe, Chinese technological innovations raise questions about the integrity of allied infrastructure, Russian election interference undermines democracy itself, while Chinese mercantilism causes many to question the very principles of an open global economy.

The U.S.  and Europe should move beyond universalist notions of  a rules-based international order toward a commitment to uphold free societies. This would mean working together to address the challenges posed by the authoritarian model. It means an economic dialogue that goes well beyond the Transatlantic Trade and Investment Partnership to address the shortcomings of the global economic order (corporate tax avoidance, inequality, the failure to prepare adequately for automation) and the challenge posed by China (cyberespionage and cyberattacks, the use of state-owned enterprises, and technological competition). It means forging a common position on the rules, whether for cyber, AI, big data, or trade. It means working together to combat election interference and standing together for liberal values when they are threatened, in old ways or new.

An agenda to uphold and protect free societies will be challenging. Europeans may worry about becoming embroiled in America’s competition with China. Americans may be frustrated with having to compromise where real differences exist, particularly with respect to technology and the global economy. But ultimately this rationale offers a way to deal with the challenges of the future that affect the lived experience of all American and European citizens.