Geopolitical reality tends to change far more slowly than perceptions of it. To take a geophysical analogy: Underlying trends are like plate tectonics, slow to develop but irresistible over time; perceptions are like the weather, sometimes dramatic, often unpredictable and hardly irrelevant, but of lesser impact all the same. Perceptions of Europe have shifted markedly
in just the past few years. Where once stood an attractive post-nationalist model of peace, prosperity, social justice and ecological virtue now stumbles a larger but seemingly aimless and far more ungainly project. Europe today seems apathetic about its achievements, confused about its future and largely ignored by those not directly affected by it. Thanks to the financial crisis and its meandering aftermath, Europe’s problems and limits seem lately to have accumulated into a genuine crisis. To understand how read Walter Russell Mead brilliant April 27 post on the economic origins of the “Greek” dimension of the crisis.

But is it really a major crisis we hear thundering toward us, or just the cacophony of nervous nellies? Is the promise of the once-vaunted European model now revealed as just a passing breeze, or is it our current dour attitudes that will dissipate once the economy stabilizes? The American Interest put the question to eight observers, four European and four American, for our July/August issue.

As it stands now, Europe has lost its self-confidence, its energy and its hopes that the next century will be the “European century.” From Beijing to Washington—and even in Brussels itself—the Old Continent is widely viewed as a spent geopolitical force, as a great place to live but not a great place to dream. While America is fighting “declinism” as its worst enemy, Europe has decided to embrace it. In fact, these days the European Union is less a declining power than a “retired power”—wise but inactive, prosperous but elastically accommodating.

The irony is that all this comes at the very moment when Europeans have good reason to believe that they were right in their criticism of both the Anglo-Saxon economic model and America’s unipolar dreamworld. The perversity of the situation is that the European model has fallen victim not to its failure but to its success. At present, the European economy is the biggest in the world. The euro will survive the Greek crisis and probably emerge stronger for it. European companies are doing better than many dared hope some years ago. The European welfare state has demonstrated its resilience even in times of global economic crisis. And while public opinion is divided, to all appearances America is trending European in the Age of Obama rather more than Europe is trending American.

Paradoxically, however, the financial crisis and its aftermath, instead of demonstrating the superiority of the European socio-economic model, has turned into a profound crisis of the European Union’s political self-confidence. The crisis of the euro unravelled a dramatic clash: In order to sustain its economic model the European Union needs more political integration, but virtually all European publics are hostile to any move toward a more federal Europe.

Diverse factors have contributed to Europe’s sour mood, the most important being demography, democracy, loss of geopolitical importance and a lack of leadership.

Demographic reality, in particular, plays a critical role in explaining Europe’s fears about the future. Europe’s population is aging, its support ratio is shrinking, and the new generation of workers isn’t large enough to restore the balance. The data projections tell us that the median age in Europe will increase to 52.3 years in 2050 from 37.7 years in 2003, while the median age for Americans in 2050 will be only 35.4 years. Europe’s share of global GDP is thus liable to shrink in the decades to come, for immigration is unlikely to provide Europe with a solution for its demographic weakness. European publics are frightened by any prospect of growing immigration; indeed, Europe’s failure to integrate the fast-growing number of second- and third-generation European-born “immigrants” lies at the core of Europe’s newly felt insecurity. Europe’s economics demands more immigrants than Europe’s politics is ready to tolerate.

Europe’s democracy, in turn, which is of far more recent vintage in most of the continent than present citizens would prefer to recall, was conditioned on ethnically homogeneous societies and well-functioning welfare states. Both conditions are now under intense pressure, leading European elites increasingly to fear the return of identity politics. Extreme parties are invading the political mainstream, and some of the current majority groups are frightened by the decline—real or imaginary—of their influence and power. According to a 2008 report of the British government’s Office of Communities and Local Government, white people are less likely to feel they can influence decisions affecting their country. Threatened majorities—majorities that display social psychological characteristics normally attributed to minority groups—are the new political force in many European democracies.

Europe’s loss of geopolitical centrality also helps explain its change of heart. The reason is not simply that European powers are not major actors on the international scene; that has been true for decades. What is new is that Europe no longer projects itself into where the action is taking place. Contrary to its behavior in the 1990s, the European Union today is a risk-averse, neither-here-nor-there power. It has been paralyzed by a deficit of solidarity, imagination and sound leadership.

The emergence of a more multipolar world has had unexpected consequences for Europe’s worldview as well. Despite Europe’s sharp criticism of America’s recent unipolar delusion, in reality a world order built on seemingly unassailable American power was most hospitable to the European project. It was America’s global hegemony that enabled the European Union to emerge on the world stage as an attractive power in the first place. American hegemony made room for the European Union to experiment with being an unconventional, non-nation-state actor and freed it to concentrate on its internal scope and institutional architecture. America’s security umbrella, not least, allowed the European Union to become a global power without needing to become a military power. The liberal American order, as it evolved into the 1980s and beyond, turned the world into a competition among companies as much as one among states, a transformation that perfectly suited European interests.

In the new post-American world, however, the international stage will likely be dominated by 19th-century-minded powers whose fundamental assumptions are alien to the Brussels consensus. The incipient renormalization of international politics away from the dreams of liberal-international idealists and back to that of tragedy-aware realists has turned Europe’s advantages into vulnerabilities. Nobody has better captured the situation than U.S. Secretary of Defense Robert Gates, who, in a February speech at the National Defense University, expressed his fear that the “demilitarization of Europe—where large swaths of the general public and political class are averse to military force and the risks that go with it—has gone from a blessing in the 20th century to an impediment to achieving real security and lasting peace in the 21st.”

Finally, the European Union has also been hard hit by a change in ideological fashions. Over the past decade, European public opinion assumed that globalization would hasten the decline of states as key international actors and nationalism as a seminal political motivator. In other words, Europeans tended to read their own happy experience of overcoming ethnic nationalism and political theology as signaling a universal trend. As Mark Leonard has put it:

Europe represents a synthesis of the energy and freedom that come from liberalism with the stability and welfare that come from social democracy. As the world becomes richer and moves beyond satisfying basic needs such as hunger and health, the European way of life will become irresistible.¹

But what until just yesterday seemed universally applicable in the European experience begins to look exceptional today. Even a passing glance at China, India and Russia, not to speak of the vast reaches of the Muslim world, makes clear that both ethnic nationalism and religion remain major ideological driving forces shaping global politics. Postmodern post-nationalism and secularism are making Europe different from the rest of the world, not making the rest of the world more like Europe.

The world is becoming more capitalist, it is true, and in that sense more Western. The American-bred financial crisis has not soured most of the prospering former Third World on Western macroeconomic orthodoxy. But this does not necessarily mean that the world is becoming more democratic or more social-democratic. In the world’s rising ideological cycle liberalism will be in retreat. Indeed, ethnic nationalism and religion are not only ever more present in the non-European world; they are also more present within Europe itself. Brussels as the capital of the European Union is very different in spirit from Brussels as the capital of Belgium. The former is in love with diversity and multiculturalism; the latter is witnessing the rise of symbolic politics and the return of the ghost of ethnically driven partition.

In short, the ideological and geopolitical impact of the current economic crisis has affected Europe much more than America. The crisis has put post-national politics on trial. It has evoked collective national experiences and revived national narratives long thought shut up in metaphorical archives, Germany’s behavior being the best illustration of both. At the heart of Europe’s loss of ambition is the fact that the European Union succeeded in creating an institutional identity but not the political identity that needs to be at its heart. The crisis of the euro has revealed a dramatic lack of solidarity in Europe. Over the past few weeks many have been asking, “Will the Germans who are so reluctant to bail out the Greeks be ready to die for the Poles? Do Greeks who have been lying to their European partners for years have any moral right to appeal to Europeans’ sense of solidarity?”

It is still too early to write Europe off. Being a retired power is Europe’s choice for now, not necessarily its ultimate fate. Time will tell and we shall see. But the European model we knew—meaning not just the framework of social democracy but the political-ideological teleology that went with it—is no more.

¹ Leonard, Why Europe Will Run the 21st Century (Fourth Estate, 2005), p. 7.