Europe’s anti-American itch

BERLIN – It’s cold in Europe, the economy is collapsing and the natives are restless. There is only one answer: Blame America.

Pointing across the Atlantic has long been a favorite diversionary tactic of European political elites when things start to get dicey on the continent.

Whether it’s the war in Ukraine (Washington shouldn’t have expanded NATO), natural disasters (too many American SUVs fueling climate change) or the disappearance of French as a lingua franca (Hollywood without culture), America is inevitably the culprit.

In the latest installment of this tedious tradition, European officials attempt to blame greedy Americans for the continent’s current funk, accusing them of placing the mighty dollar above allstooping so low that he is even profiting from the war in Ukraine.

“The fact is, if you look at it soberly, the country that benefits the most from this war is the United States because it sells more gas and at higher prices, and because it sells more weapons,” a senior EU official told my POLITICO colleagues last week.

Sobriety, however, is not a quality one could safely attribute to the anonymous accuser.

Leaving aside the fact that Ukraine would have collapsed months ago if the United States had not intervened, the direct impact of Russia’s war on the US economy of $26 trillion from the sale of natural gas and arms is a drop in a bucket.

On the one hand, the United States exports less than 10% of its natural gas production. In 2021, the value of these exports was approximately $27 billion. While Europeans are understandably unhappy that their gas prices are four times higher than in the United States, no one has told them to become dependent on Russian gas or to turn off fully functioning nuclear power plants (in fact, Washington has been telling them for years not to).

The accusation of so-called arms war profiteering is no less hollow. Of the roughly $30 billion in military aid the United States has provided to Ukraine so far, the bulk of the equipment has been donated.

While US defense contractors stand to benefit from stock replacement and stronger demand for weapons among NATO allies, their European counterparts stand to benefit as well.

Yet therein lies the rub: European companies should benefit as much as Americans, but don’t. The main reason is that Europe has underinvested in its defense industry.

Germany’s recent decision to buy American F-35 fighters, for example, was motivated by the simple fact that there is no European alternative. A plan by France, Germany and Spain to develop a “future combat air system” was drawn up in 2001 but has yet to start amid ongoing infighting.

Political resistance by several European states against arms exports has further hampered the region’s arms industry.

Take the Leopard 2 main battle tank, made by German Krauss-Maffei and considered by many to be the best in the world. Despite this reputation, the Germans lost out to South Korea when NATO ally Poland recently ordered nearly 1,000 new tanks. While price was one factor, political uncertainty was another, according to a person familiar with the decision, citing Berlin’s decision to block the sale of decommissioned infantry fighting vehicles and battle tanks to the Ukraine.

Europe’s main bugaboo these days when it comes to the United States involves a set of green subsidies introduced by the Biden administration that benefit American businesses.

One of French President Emmanuel Macron’s top priorities during his state visit to Washington this week will be to relax the provisions of Biden’s Inflation Reduction Act (IRA), a far-reaching legislative initiative covering everything from climate to health. European officials describe it as a reincarnation of the Smoot-Hawley Act, a catalog of tariffs in Washington introduced in 1930 that historians blame for worsening the Great Depression.

Europeans fear generous “Made in USA” subsidies will undermine their industry and threaten a trade war.

The inconvenient truth, however, is that Europeans are struggling to get their own businesses to invest in them because governments have focused more on subsidizing household gas bills than helping industry. of the region to overcome the crisis.

“Europe is not cost-competitive in many areas, especially when it comes to electricity and gas costs,” said Thomas Schäfer, who heads the Volkswagen brand, in an article on social networks criticizing European industrial policy.

“If we fail to bring energy prices down quickly in Germany and Europe, investments in energy-intensive production, or in new battery cell factories, in Germany and the EU will not will be more feasible,” he said.

Yet ask the government district of Berlin what is really holding the German economy back these days and the answer is clear.

“The United States is pursuing a massive industrial policy with protectionist tendencies,” Lars Klingbeil, co-leader of German Chancellor Olaf Scholz’s Social Democrats, told Die Welt last week. “It shouldn’t be that US economic policy targets us Europeans.”

The sad reality is that the Biden administration probably didn’t even consider Europe when deciding on grants.

This fact alone should give Europeans pause.

The problem is not that Europe doesn’t matter to the United States, but rather that it doesn’t matter as much as Europeans would like to believe.

When it comes to innovation, Europe is a desert. There is no European Apple, Google or Tesla. Indeed, Tesla’s market value is four times that of the entire German auto industry.

That’s why it’s hard not to conclude that Europe’s blame game is really about something else: envy.

Despite America’s political divisions, the country has never been stronger in terms of military might or economic power.

Europe, meanwhile, has become more dependent on the United States than it has been since the Cold War, a circumstance that fuels both resentment and the blame game.

In Germany, a book called “Am IIt’s time to go!” (Am I is German slang for Americans) became a bestseller. The author is Oskar Lafontaine, a former finance minister who led the Social Democrats before breaking with the party.

“We must free ourselves from the tutelage of the United States,” writes Lafontaine, describing America as the root of most evils and arguing that Europe must chart its own course.

Judging by the past century, Europeans would be well advised to ignore this and accept that they have only themselves to blame for their current malaise.