On the eve of the EU Summit, Mark Sheetz offers the following commentary, which differs in some respects from mine. 

In several recent blogs on the euro crisis, Stephen Walt has expressed exasperation with European leaders and pessimism on the fate of the eurozone. His reaction is understandable and consistent with virtually all journalists and economists who study the issue. They are frustrated at the slow pace of European decision-making and the fact that a solution seems obvious. In recent days, demand for action has become nearly hysterical, with analysts, columnists, and editorial writers for the New York Times suggesting that time for a solution is "running short," that "the endgame is fast approaching," that the eurozone is facing a "meltdown," and that a collapse is "perhaps inevitable."

So, what is the solution? Conventional economic wisdom insists that either Germany acquiesce to some sort of bailout or the eurozone is finished. Germany must consent either (a) to the issuance of joint and severally liable Eurobonds or (b) to a policy of monetary easing by the European Central Bank (ECB). The problem is being treated as a technocratic economic matter.  Hence, technocrats have come to power in Greece and Italy. But the matter is essentially political and the crisis turns on central problems of international relations theory, like anarchy, sovereignty, and power.   

Economists believe that the basic problem of the eurozone is economic: that national economic imbalances can no longer be restored through the traditional method of currency devaluation.  But the problems of the eurozone are fundamentally political: (a) it expanded too fast, wider won out over deeper, (b) there is no commitment to common budgetary policies, and (c) there is no mechanism to enforce agreements.

The debate is congealing around two poles, a pessimistic pole predicting the breaking apart of the eurozone versus an optimistic pole of closer integration. The solution includes both. On the one hand, wide economic disparity among members of the eurozone will force weaker members to leave. Greece, as well as those countries that use the euro but cannot afford it (PIGS), will be cast off from the eurozone by a mounting centrifugal force.

On the other hand, the remaining members will converge on tighter economic policy along the German model. As a corollary to more restricted membership, those countries remaining in the eurozone will harmonize their policies regarding deficits and government pensions and achieve some sort of convergence in the major items affecting budget deficits. This will have the effect of bringing Europe closer together, or at least those countries that can achieve convergence. It may also create a more politically coherent Europe, with those remaining in the eurozone leading the European Union economically and politically. Such a situation might even give a common foreign policy the chance to develop and cohere around a small group of stronger European countries.

Some believe that a Greek expulsion from the eurozone will be catastrophic. They assume that a Greek default within the eurozone is manageable, while a Greek exit would make contagion worse. My own feeling is that contagion -- and the accompanying collapse of the European project -- would be the result of Greece staying in the euro, not the result of Greece getting out.  The recent evidence of market contagion to Italy and Spain appears to support this claim. A referendum in Greece would have cleared the air. It would have restored a stark reality that European leaders would not be able to evade. If Greeks had voted "no" on the referendum, Greece would have had little choice but to return to the drachma. That would have been a lesson to others. They would have recognized that they have only two choices: (a) converge fiscal and monetary policies or (b) press the "eject" button. The problem now is that European leaders may still think they can muddle through by patching up a country here and there. That will destroy the clarity exposed by a Greek default.

The divide, as usual, is between France and Germany over monetary policy. The French, along with their southern European allies in Greece, Italy, Spain, and Portugal, favor easy money, while the Germans, along with northern Europeans in the Netherlands, Austria, and Finland, insist on a tight money policy. Any hint of German capitulation to French demands of easier money will be the end of the euro. The first sign of wavering, the first inkling that a compromise is afoot, will signal to the markets that the floodgates for a river of euros are open, that fiscal and monetary discipline are history, that inflation will be rampant, and that the euro will be worthless.

Germans will not pay for the profligacy of their neighbors. Otherwise, where would it stop? Any concession towards easy money will only reinforce the "moral hazard" of further risk-accepting behavior. It is a story as old as Aesop: the ant and the grasshopper. Germany entered into the euro under assurances that all members would conduct their economic affairs responsibly. If this is no longer the case, then Germany will reserve the right to withdraw. A former British chancellor of the exchequer agrees, insisting that Germany would sooner withdraw from the euro than see its integrity compromised. Another (not insignificant) factor is the survival of Angela Merkel as chancellor. Any suggestion of Merkel wavering at the prospect of easy money is tantamount to political suicide. So all the speculation that the ECB or the EFSF will "stabilize" (rescue) the euro is so much folderol.

The power calculus, then, favors Germany. France will be dragged along kicking and screaming, but two points suggest eventual French capitulation. One is that Germany will otherwise threaten to secede from the euro, which would put France in a nasty competitive economic position. And the second is that, without the unity embodied in a common currency, French hopes of ever again exerting influence on the world scene will have evaporated. Europeans understand that they cannot meet global challenges as individual nations because they are no longer great powers. As President Sarkozy conceded, "If Europe does not change quickly enough, global history will be written without Europe."

The original path to the common currency was through a convergence of economic policies. Nations would have budget deficits of no more than 3 percent of GDP, and total debt of no more than 60 percent of GDP. If euro members had stuck to these criteria, they would be in dandy shape now. So a return to that mechanism, with additional penalties for non-compliance, might work. The problem is to create binding agreements.

On the question of enforcement, one possibility mentioned is an automatic increase in taxes to offset a budget deficit beyond acceptable limits. Other devices to ensure compliance with EU oversight of national budgets are available for the same purpose. These sanctions would be imposed by a central authority that can override national budget decisions. The European Court of Justice and the European Commission have been suggested as ultimate arbiters, but such supranational enforcement has its limits in a union of sovereign states.

Sovereign governments may oppose such measures for domestic political reasons. As long as sovereignty remains, national governments may negate previous agreements. Even within national governments, as in the U.S. Congress, existing legislatures may negate the agreements of previous legislatures. Therefore, a more severe penalty is required. 

The ultimate penalty for non-compliance is, of course, expulsion. The eurozone could expel any country that fails -- after a suitable time period -- to adhere to budgetary guidelines set forth in a new agreement. The ultima ratio of economic union is expulsion, just as the ultima ratio of politics is war. It lurks behind every decision as the final alternative.

So the demise of the euro, as a proxy for the EU itself, is not on. Neither is a consolidation on the German federal model. A big push for more Europe is not in the cards now. The loss of that much national sovereignty is unrealistic, given the immature development of a European identity. That is why convergence of fiscal and economic policies is the most likely outcome, not complete structural reform.

But convergence will not save the euro if member states refuse to comply with agreed guidelines. Both France and Germany violated the guidelines in 2003, breaking through the barriers of 3 percent budget deficits and 60 percent debt for more than a year. If the founding members of the eurozone fail to comply or to remedy violations within prescribed time periods, then the euro will well and truly collapse. In a union of sovereign powers, political will is the ultimate arbiter.

Mark S. Sheetz is an Associate in the International Security Program at the John F. Kennedy School of Government of Harvard University. He is currently writing a book on France, Germany, and the Transformation of Europe.  

The struggle to save the euro is beginning to look like a chase scene from an Indiana Jones movie. First, our hero dodges the landslide, then runs from the spear-wielding aborigines, then is surprised by a snake ("I hate snakes!"), then is pursued by well-armed Germans and has to escape on horseback, only to plunge over a waterfall, only to be captured by ... you get the idea.

So this week we had 48 hours of excitement after Greek Prime Minister George Papandreou announced he was going to hold a referendum on Greece's acceptance of the European bailout. Consternation reigned, and markets tumbled. And then he said, in the best tradition of Emily Litella: "Never mind." Markets rebounded, and the bus lurched on toward the next crisis.

As I've emphasized before, I'm no macroeconomist (although my respect for some of them has been dropping steadily since 2007). From my decidedly non-expert perspective, here's what I've concluded.

The real issue with respect to Greece and Italy (and thus, the euro) is whether genuine economic growth can be restored to these economies. All the bailouts and austerity and haircuts (i.e., voluntary reductions in debt) in the world won't help these states (and especially not Italy) if they can't generate enough economic growth to pay back what they owe. (Strict austerity is a problem here, by the way, because it reduces growth in the short term). If they don't grow they can't pay, which will place a lot of European banks at risk of major losses and maybe bankruptcies. And because this whole arrangement depends on confidence -- a debt is an asset if you think it will be repaid, but it's a loss if you believe it won't -- you'll get a credit event if the markets ever conclude that growth won't happen and the debts won't get repaid, and the euro is probably finished (at least in its present form). End of story.

So the fact that things have calmed down a bit (just as they do at the end of a good chase scene), doesn't tell us much about the future. All these diplomatic machinations to arrange rescue packages, etc., can buy time, but they won't solve the problem if economic growth does not return. And the big difference between this thriller and a Spielberg movie is that the script is being written as we go along and we have no guarantee of a happy ending.

Perhaps the single most remarkable development in 2011 is the wave of political protests that have occurred in widely-varying political contexts. In addition to the various upheavals that constitute the "Arab Spring," we've also seen tent cities in Israel, the "Occupy Wall Street" movement and its clones here in the United States, and various imitators in both Europe and Asia. This wave of political contagion is more widespread than the "velvet revolutions" of 1989 (though not yet as significant), and perhaps the nearest analogue would be wave of youth-revolutions and upheavals that occurred back in 1968.

What is going on here? Is there a common set of causes at work, or at least a common thread to otherwise diverse phenomena? I think so, because I see these upheavals as fueled by three important global developments.  

The first factor is economic globalization, which has made many states both sensitive and vulnerable to events in far-away places, and led to rising inequality both between and within countries. Yet most governments have failed to enact remedial measures to soften the consequences of economic change and to restore a more level distribution of income, thereby ensuring some degree of economic pain and political discontent.

The second development is the globalization of information, which allows events and ideas to spread much more quickly. As a result, demonstrators in Cairo can watch what's happening in Tunis and imitate it, and then other people in other countries get the idea that protest can be effective, even if their particular grievances are somewhat different. And so it spreads, as the radical idea of ordinary people taking action against the seemingly impregnable becomes increasingly contagious. Plus, each group can learn from each other and feed off the sense of being part of a larger process, instead of feeling like isolated and powerless individuals with scant hope of success. This sort of thing has happened before in world history (e.g., in 1789, 1848, 1919, 1989, etc.), but never in so many far-flung and widely different contexts.

The third reason is the increasingly-evident incompetence and/or corruption of governing elites in many countries, and the tendency of governments to do too much to protect wealthy and powerful interests and not enough to help ordinary people. In Egypt, it was the overt corruption of the Mubarak regime, whether in the form of privileged deals for military officers or for Mubarak's son. In the United States, it was the taxpayer-funded rescue of "too big to fail" financial institutions as well as the "too-well connected to fail" recycling of some of the same people who helped create the whole mess in the first place. And then there's the continued recycling of policy ideas that had been discredited by events but never discarded. People may be disappointed by Obama, but real disenchantment comes from the growing realization that replacing him wouldn't make much difference and might make things much worse. You know the line: "Meet the New Boss....Same as the Old Boss." (Turns out Pete Townshend was a prophet when he wrote "Won't Get Fooled Again," which would be a nice anthem for many of these movements.)

There is, of course, a deeper taproot to all this. As my colleague Jenny Mansbridge reminded me in a superb talk I attended last week, (and which will be published next month in PS), the present combination of economic inequality and political gridlock is fatal to the proper functioning of democratic orders.  In a capitalist democracy, corporate interests tend to be wealthier than the rest of society, and the state is the only actor powerful enough to intervene to prevent corporate interests from going too far and exploiting their position. This is what happened in the Gilded Age and again in the Roaring 20s, which eventually led to the Progressive Era and later the New Deal.

But if the political system is gridlocked, then the state cannot act quickly or decisively to retard corporate power. Even worse, as corporate interests grow stronger they tend to acquire greater political power (and especially when a tame Supreme Court helps them, as it did in the Citizens United decision).  Instead of just hamstringing the state, corporate interests can get it to enact laws that favor them even more. The result will be rising economic inequality and precisely the sort of irresponsible and unregulated behavior that led to the Great Recession of 2007.

Put these three things together, and you have a recipe for global protests in very different countries. Despite the many differences between conditions in the United States, in Greece, in Egypt, in Syria, in Israel, or elsewhere, what unites the 2011 wave of global protest is the shared belief that the People in Charge do not know what they are doing, care more about their own wealth and well-being than they do about the common weal, or are simply too spineless and shallow to do what at least a few of them secretly know to be right.

Ask yourself: how many contemporary political leaders do you genuinely admire? How many of them would rate a paragraph, let alone a whole chapter, in a revised edition of Profiles in Courage? How many of them seem capable of giving you a straight answer to a hard question, as opposed to offering you a lot of happy double-talk? How many of them are better at making a powerful speech than they are at taking a principled stand and sticking to it? How many of them have really got your back, as opposed to pandering to the endless parade of well-heeled lobbyists and special interest groups? Is there political leader in your country who is not for sale?

If you've been paying attention, and you can't find such leaders in your country, and you having been watching the obscenely wealthy get richer and more powerful, so that they can rig the game to make themselves richer still, then you'd probably think about painting a sign and getting out in the streets. And if I didn't already have this blog for my soap-box, maybe I would too.

Back in 2009, right after Barack Obama took office, I published the following prediction in the Australian journal American Age:

To be blunt, anyone who expects Obama to produce a dramatic transformation in America's global position is going to be disappointed. There are three reasons why major foreign policy achievements are unlikely. First, the big issue is still the economy, and Obama is going to focus most of his time and political capital there. Success in this area is critical to the rest of his agenda and to his prospects for re-election in 2012. Second, Obama is a pragmatic centrist and his foreign policy team is made up of mainstream liberal internationalists who believe active US leadership is essential to solving most international problems. Although they will undoubtedly try to reverse the excesses of the Bush administration, this group is unlikely to undertake a fundamental rethinking of the US's global role. Third, and most important, there are no easy problems on Obama's foreign policy "to-do" list. Even if he was able to devote his full attention to these issues, it would be difficult to resolve any of them quickly.

I thought of that article and those predictions after two conversations with friends who are both experts in American politics. One is a political scientist and entrepreneur who leans toward the GOP these days, and the other is a political scientist with considerable experience in the Democratic Party establishment. My businessman friend told me bluntly: "Obama is toast. The Republicans could run a scarecrow against him and win." Interestingly, my Democratic party friend was even more outspoken in condemning the president and his advisors, and bluntly called them "a disaster." (As for my own forecasts, I think I was basically right, although Obama did not focus as much on economic matters as I expected and put too much time and capital into the health-care fight. And that is why he's in big trouble now.)

It's still early in the election season, of course, and the GOP field looks none too strong. But there's a lot of solid political science research showing that incumbent presidents have a very tough time when the economy is in the doldrums, and it's hard for me to see how Obama can get things moving again, especially when the GOP leadership has every incentive to thwart his efforts, even if it means keeping Americans out of work for another year or so.

The prospect of a one-term Obama presidency is bound to have important effects on foreign policy too. I'll bet other countries are already starting to think about the possibility, and starting to factor that into their calculations. The obvious implication is that any governments who have serious differences with the Obama administration are going to dig in their heels even more and hope for better after 2012.  It's possible that some governments who fear a more hard-line U.S. response under the GOP might be tempted to cut deals while they can, but I don't think that's very likely because they would also have to wonder if a lame-duck administration could deliver on any deal it made. The absurd length of the U.S. presidential campaign season will compound all these problems, by burning up even more of the president's time and attention over the next year or so.

This is obviously speculative and should not be overstated. But now, as in 1992, "It's the economy, stupid." And the bottom line: Expect even less from U.S. foreign policy in the year ahead. Like I said back in 2009: If you thought this administration would produce a major change in our overall global position, get used to disappointment.

If you're like me, your attention this week has been focused on the gyrating stock market. That's not my area of expertise -- though my gut tells me that the wild swings of the past few days are mostly a reflection of uncertainty -- and I won't try to tell you what it means or how you can profit from all this turmoil. (If I had the answer for that, I'd have taken my wife's advice and moved our retirement funds into cash or Treasuries a couple of weeks ago. Oh well.) 

Overall, I remain a long-term optimist about America's global position, because the United States still has lots of innate advantages and most of our current problems stem from self-inflicted wounds (stupid wars, threat inflation, a warped tax code, too much money corrupting politics, etc.). Compared with a lot of other countries, however, the United States remains geopolitically secure, wealthy, and technologically advanced. It has excellent higher education and a relatively young and growing population (especially when compared to most of Europe, Russia, or Japan). If we can just get our politics and our strategy right we'll be fine, though I admit that this is a big if.

So instead of brooding about my portfolio, I've been thinking about the Big Uncertainties that are going to shape events in the years to come. It's a subject I've visited before (see my "Five Big Questions" from July 2010), so you can consider this a partial update.

Here are my Five Big Uncertainties for 2011.

1. The World Economy: Meltdown or Malaise? Obviously, a major driver of the near-to-medium term environment will be whether we get another major economic slump. See FP colleague Dan Drezner for the nightmare scenario here, and especially bear in mind the danger that a serious slide would almost certainly lead to even more poisonous politics in lots of different places. (Like any good economist, Dan presents the optimistic scenario here, which tells you why President Kennedy used to complain that he wanted to meet a one-handed economist). The alternative that I foresee, alas, is not a scenario of rapid economic recovery. Instead, the best we can hope for is at least a couple more years of very modest economic growth. But at this point I'd take that in a heartbeat.

Read on

One of my occasional hobbyhorses on this blog has been the desirability of greater transparency on where research and advocacy organizations (and intellectuals) get their money. It's the old question: cui bono? You can read what I've said in the past here and here. I frankly would welcome a system where think tanks had to publicly disclose all of their sources of support, so that consumers of their work could see exactly who they were beholden to. Lest you think I'm being hypocritical about this, I think university professors ought to do the same with any outside income that they earn.** The reason in both cases is simple: when anyone participates in public discourse on vital issues, outsiders should be aware of potential conflicts of interest and should know exactly who might be paying for it. 

Eli Clifton at the Center for American Progress has a revealing post up on the various backers of the neo-conservative Foundation for Defense of Democracies. This organization has been in the vanguard of the campaign for war with Iran, reflexively supportive of the Israeli right, and a fertile source of fear-mongering Islamophobia. It will therefore surprise no one that its primary financial backers are also hard-core Zionists, and that the democracy it seems most committed to defending is located far from Washington D.C. 

This situation underscores a point that John Mearsheimer and I emphasized in our book: the Israel lobby is not confined to formal "lobbying" organizations like AIPAC. It also includes well-funded think tanks and advocacy organizations that actively work to shape political debate and public discourse in ways intended to reinforce the U.S.-Israel "special relationship" and to persuade policymakers to support policies that these organizations believe (in my view incorrectly) will be beneficial for Israel and the United States.

It bears repeating that there's nothing illegal, conspiratorial, or unethical about what these donors are doing; individuals and foundations in the United States are entitled to fund whatever advocacy organizations they wish. But Clifton's data helps you understand why discourse inside-the-Beltway is so heavily skewed in one direction.

**Postscript: In my own case, in 2010 I received a consulting fee from the S Rajaratnam School in Singapore and speakers' fees from eight other universities (for public lectures). I also received honoraria for presentations at several events sponsored by the Department of Defense and for participating in a colloquium sponsored by the State Department. I was also paid to speak at an Economist magazine conference in Athens and for doing some research work for the New America Foundation. Foreign Policy pays me a modest amount to write this blog, and Cornell University Press pays me to co-edit a book series.  And in case some of you are wondering, I didn't receive any money from any individuals, groups, countries, or corporations connected with Middle East politics.

About 13 months ago, I returned from a visit to Greece and said I was increasingly pessimistic about prospects for a successful turnaround there. Money quotation (emphasis added):

In order to stave off default, Greece needs to trim its budget drastically (which means throwing people out of work or reducing their incomes), while at the same time stimulating economic growth. The problem is that it's hard to do both at the same time, because cutting the budget (or collecting taxes more efficiently) reduces domestic demand and thus chokes off economic growth. And because Greece is part of the Eurozone, it can't stimulate export-led growth by the normal expedient of devaluing its currency. (The sinking Euro helps globally, but not within the Eurozone itself.) Greece's prospects for economic growth are further handicapped by conditions elsewhere in Europe: It will be hard for Greece to grow if the rest of Europe is stagnant. If the government's efforts at restructuring lead to widespread political unrest, then chances of robust growth are even slimmer. And once the financial markets begin to realize all this, bond spreads will increase again and we will be back in the same soup we were in a few weeks ago.

All of which leads me to conclude that Europe as a whole is going to be in difficult shape for quite some time, unless EU officials figure out a way to do a lot more than they have done so far. And a double-dip European recession could trigger a double-dip recession here in the United States, which would have profound economic and political consequences (e.g., goodbye to Barack's second term?)."

Back then, I was surprised that anybody thought differently (i.e., that anyone believed the initial bailout would work). It didn't, of course, and Greece, the bankers, and the EU are now back in the soup.  As the New York Times reports (my emphasis):

"Analysts and Socialist Party insiders said that Mr. Papandreou seems likely to succeed in passing the austerity package, having secured more support within the party. But economists are nearly unanimous in predicting the loans will only buy time, but do nothing to pull the country out of its economic morass and potential default.

Or as Ken Rogoff, co-author of a terrific study of financial crises ("This Time Is Different: Eight Centuries of Financial Folly), points out: "There is every possibility that at the end of this Greece is going to default anyway."

If that's true (and it sounds right to me) then Greece may have no alternative but to abandon the Euro and leave its creditors (and the Eurozone countries) to their fates. I'm no expert on these matters, but most of what I've read so far tells me that this would be very bad news for the European economy, and for us. But you can relax, because at least things are going well in Libya and Afghanistan and Pakistan and the Mideast and Japan and ...

There's a terrific piece in the National Journal today, adding up the costs of the "war on terror" and pointing out that unlike some other costly wars in American history, this one has produced almost no economic benefits. That is, unless you think people standing in TSA lines are using those idle minutes (hours?) to dream up lots of innovative new ideas that will fire up the U.S. economy. I rather doubt it.

If we had a rational discourse on this subject, it ought to provoke two questions.  First, how did we get into this mess in the first place? Specifically, what were the U.S. policies that contributed to the rise of groups like Al Qaeda, and made it difficult-to-impossible to head them off before they hit us? (You'd think the 9/11 Commission would have tackled this question head on, but of course that proved too controversial for them). This subject hasn't been wholly neglected since 9/11 (i.e., there was some discussion of the familiar "why do they hate us?" question), but even raising the question could get you accused of being someone who "blamed America first." So hardly anybody asked if maybe 9/11 was also a wake-up call, and that there were some aspects of U.S. foreign policy that needed to be rethought. Of course, raising the question doesn't necessarily mean that the policies that contributed to Al Qaeda's rise (e.g., stationing troops in Saudi Arabia, unconditional support for Israel, propping up the Mubarak regime in Egypt, etc.) were necessarily wrong, but it does suggest that these policies were more expensive than we previously believed.

The second question would be: which responses to 9/11 have worked well, and which policies have proven to be costly failures?  Ideally, the United States ought to conduct a ruthless assessment of the post-9/11 response, in order to determine -- to the extent possible -- which of the post 9/11 policy changes were effective and which were not. The purpose here isn't a witch-hunt directed at former government officials, as I assume that even the neocons who led us blindly into Iraq believed that this decision was in the best interests of the country. But now, nearly ten years later, we ought to be mature enough to recognize that some of the actions we took after 9/11 weren't that smart, while some other responses turned out to be quite effective. And both ends of the political spectrum should be open to revising their views: some policies abhorred by liberals (such as electronic eavesdropping) may actually have been a net positive, while some actions favored by hardline conservatives (such as waterboarding and other forms of torture) should be seen as misguided failures.

That is how a mature great power would deal with the vast and costly response that began on 9/11: it would try to learn the right lessons from the past decade so that it did better the next time it faced an unexpected challenge. But in the polarized, partisan, and fact-free world of contemporary policy discourse, how likely is that?

My previous post on the future of the Euro has attracted some critical comments from various parts of the IR/IPE community, see here and here. My critics make some interesting points (though I found them a bit hard to follow), but their central argument is that these broad paradigms don't make sharply differing predictions about this issue. In other words, what happens to the Euro (or the EU itself) would be consistent with any of these paradigms, and so my original question was misplaced.

What's perhaps most interesting about the comments is that none of respondents seem to have gone and looked at the realist work that is most germane to this issue, and to which I alluded in one of my links.  I refer to the work of Sebastian Rosato of the University of Notre Dame, who has recently published an important book entitled Europe United: Power Politics and the Making of the European Community. (Full disclosure: Rosato took a course from me at the University of Chicago over a decade ago, but I left Chicago before he wrote his thesis. His book was published in the book series that I co-edit, but I wasn't the editor who handled his manuscript)  

In any case, Europe United is a decidedly realist account of the EU's formation and evolution.  Rosato is also a pessimist about the fate of the Euro, on both purely economic but also what might be termed "power-political" grounds. Critics of my original post are correct that I don't have a "realist" theory on this issue, but Rosato does. (He also has a forthcoming article in International Security that lays out his arguments regarding the euro in more detail).

Without presuming to speak for him, I'd just make two points. First, as I made clear in my original post, I don't think the evolution of the euro or the EU will decide the validity of rival theoretical approaches to international relations. Despite my realist proclivities, I actually see some virtue in most approaches to international relations, and the trick is determining what weight to give each one and how to adjust the weights in different circumstances. In short, I stand by the views I expressed here.

Second, I still believe these rival perspectives do lead to different expectations about Europe's future course. Realism, liberalism, and constructivism all agree that states will cooperate in some circumstances, but realists are more skeptical about the scope and extent of cooperation and tend to see underlying power distributions and security concerns as central to the process, especially between major powers. Accordingly, a realist account of the EU would stress that these states agreed to constrain their own autonomy and sovereignty largely in response to an unusual power configuration (i.e., the Cold War), and as much for security reasons as for purely economic ones. The end of the Cold War removed that power configuration, and we have seen the EU both expand and fray ever since. Germany's unwillingness to keep subsidizing profligate countries and European concerns about the implications of Germany's increasingly dominant role (as highlighted in this NYT article) are consistent with that view.

By contrast, liberal accounts of the EU emphasize the role of economic interdependence and welfare concerns as the main driving factor.  In this view, so long as high interdependence obtains, the EU has little choice but to find a way to stagger forward. Constructivist approaches offer a third alternative: the EU will survive because it has led to the emergence of a nascent "European" identity that is gradually trumping national loyalties, and so distributions of power and other traditional realist concerns aren't really relevant anymore.  

So we do have three contrasting views-one of them generally pessimistic about the EU and the euro, and two of them generally optimistic-and we can now wait for the passage of time to reveal which prediction is correct.

Bottom line: I don't think my original question was silly, but I am glad to have stimulated a bit of discussion.

I'm just back from Southeast Asia, and a combination of accumulated email, looming deadlines, and jet lag will keep me from offering a lengthy account of the trip. Suffice it to say that I had a terrific time, with the highlight being my first visit to Vietnam. I gave lectures there on "China's Rise and America's Asian Alliances" and "Opportunities and Challenges in 2011" at the VNR500 Forum 2011 (a conference of the "top 500" Vietnamese companies), at the Fulbright Economics Teaching Program in Ho Chi Minh City, and at the Vietnamese Diplomatic Academy in Hanoi. I did an online interview with Vietnam.net, an important online newspaper in Vietnam, and met with a number of Vietnamese officials, mostly from the Foreign Affairs and Information ministries.

My impressions? First, there's clearly a tremendous amount of energy in Vietnam and lots of signs of economic potential. In addition to a wide array of restaurants, shops, and small enterprises, there are a growing number of industrial enterprises and (to me, at least) surprisingly modern "downtown" sections in both Hanoi and Ho Chi Minh City. Vietnam's growth potential remains limited by underperforming state-owned enterprises, corruption, and significant infrastructure challenges. But assuming those impediments can be overcome, I'd be bullish about its economic future (and it hasn't been doing all that badly in recent years, growing at about 7 percent).

Second, my visit coincided with the Party Congress, and though I'm hardly expert, I gather the results are something of a mixed bag. The new party secretary, Nguyen Phu Trong, represents the old guard, which means that rapid reforms are less likely. On the other hand, I gather that reform elements are more numerous in the Central Committee and other party institutions, and the prime minister, Nguyen Tan Dung, supports closer ties with the United States.

Which was another theme of my visit. The Vietnamese don't appear to have any hard feelings toward the United States (I didn't catch the slightest hint of any lingering resentments from the war), and it's probably noteworthy that virtually all the visitors at the war museum in Ho Chi Minh City were Westerners. This lack of resentment isn't all that surprising; as they see it, they beat us fair and square. Instead, the audiences at my talks (which included a fair number of students and intellectuals) and the officials with whom I met all sounded eager for closer ties with the United States. As I noted earlier, they were mostly concerned that the United States might cut some deal with China that would leave them isolated.

And China is a major long-term concern. That's hardly surprising either; all you have to do is look at a map and know a little bit about Sino-Vietnamese history. They have no desire for an open confrontation with Beijing, and Vietnam has a lot of important economic ties with China that could give the Chinese leverage in the future. But they are also under no illusions about the dangers of Chinese dominance (Vietnam was ruled by China for several hundred years), and I didn't sense much danger that Vietnam will bandwagon with Beijing. In that regard, the people with whom I spoke were clearly reassured and pleased by the tougher line the United States has taken regarding territorial issues in places like the South China Sea. So if Sino-American rivalry intensifies (as I expect it will), Vietnam will be an important U.S. ally.

All in all, it was a fascinating trip, and I'll be digesting my impressions for some time to come. And now it's time to catch up on what's been happening in the rest of the world; but first, I have to dig out the driveway.

I am swamped with teaching, travel and some writing deadlines the next two weeks, so my blogging output will probably be sparse. Sadly, this pindown coincides with Obama's big Asian trip, and I regret not being able to comment at length. Given that I think the United States' strategic attention ought to be shifting toward Asia, the trip is long overdue and I'm mostly glad Obama is taking it. 

But like Frank Rich, one does wonder about the timing of this particular journey. In his column yesterday, Rich complained that blowing town right after last week's "shellacking" in the midterms sent exactly the wrong message, especially when India is a country that Americans tend to associate with outsourcing and lost jobs. (There's even a new sitcom exploiting that idea.)

My concern is somewhat different. As the United States works to shore up existing alliances in Asia and to strengthen or forge some new ones, it will have to do a fair bit of hard bargaining. Even if there are strong geopolitical forces pushing states like India and the United States together, there are also lingering differences over specific policy issues (such as Afghanistan and Kashmir). Moreover, even close alliance partners will want to get others to do most of the heavy lifting, which usually means some tough negotiating. 

My fear, therefore, is that a weakened president with a weak economy will be too eager to make deals while he's on the road. Despite our current woes, Obama should not be so desperate for symbolic foreign policy "achievements" that he ends up looking or sounding like a supplicant. Our Asian partners still need us more than we need them, and the United States hardly needs to be begging them to cooperate with us. 

The Council on Foreign Relations is not the first place I look for outside-the-box thinking, but can be a useful weather-vane marking shifting attitudes within the establishment. And on that score, two articles in the upcoming issue of Foreign Affairs merit your attention.

The first article, entitled "American Profligacy and American Power," is by former Deputy Treasury Secretary Roger Altman and Council President Richard Haass. It is telling indictment of past policy errors that have undermined American power, and it is refreshing that Altman and Haass outline the strategic implications clearly. Some money quotations, with my emphasis added:

One way or the other, by action or reaction, there will be a profound shift in U.S. fiscal policy if the U.S. government continues to overspend. Deficits will be cut sharply through a combination of big spending cuts, tax increases, and, quite possibly, re-imposed budget rules. No category of spending or taxpayers will be spared."

But the impact of the United States' skyrocketing debt will not be limited to the behavior of markets or central bankers. Federal spending will decrease once the inevitable fiscal adjustment occurs, and defense spending will go down with it. …

Read on

Back on Sept. 16, I gave a lecture at Cornell University's Einaudi Center for International Studies. The title was "Doomed to Fail: The Foreign Policy of Barack Obama," and in it I elaborated a number of themes that I've also addressed in several blog posts, including this one and this one. The audience was attentive, the questions were excellent, and I especially enjoyed my conversations with Cornell students afterward.

One member of the audience took issue with my central theme during the Q and A, and offered a perceptive alternative analysis. He argued that I hadn't given Obama sufficient credit for staving off an even deeper collapse of the U.S. and world economy, and he reminded me and the audience that Obama inherited an economy in free-fall. Back then, a lot of people were genuinely worried that we were headed toward a 1930s-style global depression. We seem to have avoided that fate -- knock wood-at least so far.

The questioner also pointed out (correctly) that a further melt-down would have caused great human misery and had poisonous effects on politics at home and abroad, fueling even more xenophobia, conspiracy theorizing, and nativism than we have already seen. And if that had happened, then the failures that I had focused on in my talk (Afghanistan, Israel-Palestine, Iran, China, etc.) would have seemed like minor problems by comparison.

On the whole, I thought he made a very good point. Although I had begun my talk by describing the mess the Obama inherited -- including the economic downturn -- I hadn't given him enough credit for the economic measures undertaken at the very outset of the administration. Critics may be right that he should have done more to rein in Wall Street, pushed for a bigger and less pork-driven stimulus, etc., but the fact remains that we didn't tumble totally into the abyss, and we've already forgotten how worried everyone was back then.

The problem Obama faces, alas, is that you don't get much political credit for preventing non-events. He'd be blamed if the 2008-09 depression had gotten worse, but he gets no applause for preventing any number of Very-Bad-Things-That-Might-Have-Occurred-But-Didn't. In addition to the Even-Greater Depression of 2009, other non-events include the 2009 Israeli attack on Iran, the Venezuelan-Colombian border war of 2010, and al Qaeda's successful attack on Yankee Stadium last week. I could go on but presumably you get the point: we're not very good at giving our leaders credit for the bad things that don't happen on their watch. And to be fair, that goes for Obama's predecessor too.

I've been perfectly happy to criticize Obama & Co. when I thought they were making mistakes, but my critic's question reminded me that we ought to give them credit where's it due. Hence this post.

Secretary of Defense Robert Gates has sensibly concluded that when the United States: 1) Is facing massive federal budget deficits, combined with a looming fiscal crisis at the state and local levels, 2) Is already spending more on national security than the rest of the world combined, and 3) Faces no "peer competitors" or dangerous great powers nearby, then it makes sense to make a few modest cuts in its military spending.

Of course, patriotic Congressmen will now fight tooth-and-nail to preserve spending in their states or districts, so it's not even clear how much money will ultimately be saved. But it's a step in the right direction, and Gates deserves credit for seeing where the wind was blowing and for addressing the problem, even if only in a modest way.

Just don't lose sight of the real issue, which is not so much the amount of money we devote to national security as the purposes for which we use these capabilities. It doesn't make much sense to cut spending if you're going to continue to use the military on ill-advised missions; in fact, if you have a very ambitious foreign policy, then you ought to expect to spend a lot of blood and treasure on it. As the Times noted this morning, the White House backed Gates's plan, saying that "his plan would free money that could be better spent on war fighting." And when some key elements of your foreign policy make you very unpopular in large swathes of the world, it will probably fuel anti-American terrorism and create dangers that might not exist otherwise, or at least might not be as large or as difficult to address.

In other words, the debate that is about to occur about Pentagon cuts is mostly a disagreement about the allocation of pork and short-term priorities. Gates did not propose any change in the roles and missions of the U.S. armed forces, in our international commitments, or even our overall force levels. His proposals do not invite a debate about the fundamentals of U.S. grand strategy. And until that debate occurs, don't expect major changes in America's force posture or its underlying belief that it has the right and/or responsibility to intervene in far-flung corners of the world, even when vital interests are not at stake and when we don't really have any idea how to run these places reliably.

On the latter point, I hope you caught the delicious irony on General Ray Odierno's statement that U.S. forces in Iraq were now there "to prevent foreign powers from meddling with Iraq's new government" (h/t Yglesias and Greenwald). It's easy to lampoon such a comment -- weren't we "meddling" just a bit when we invaded in 2003? -- but the real lesson is that this is how virtually all imperial powers tend to see their own conduct.  Great Britain claimed to shoulder the "white man's burden" (i.e. to bring civilization to its benighted colonial subjects), and the French saw their colonial role as "la mission civilizatrice." The former Soviet Union thought it was helping spread the benefits of socialism to its Third World clients, and the United States has convinced itself that it is spreading freedom, democracy, liberty, the rule of law, "world order," etc.   

I don't know if countries tell themselves this sort of thing in order to rally support for interventionist policies, or to convince other states that their actions are inspired by noble aims rather than the self-interested dictates of realpolitik (probably both). Whatever the motivation, I remain convinced that the United States would be better off if it devoted more attention to nation-building here at home, and somewhat less to fruitless efforts to do so abroad, especially in those places where the preconditions for Western-style liberal democracy are sorely lacking.