France and Germany See Biden on a European Recruiting Mission

Dr Ivanovitch - MSI Global
Dr. Michael Ivanovitch

America’s key European allies seem unwilling to join Washington’s call for democracies to confront Russia and China.

Germany says it does not need a “reset” in its relations with Russia. And, reflecting the views of its powerful business community, Berlin is clearly signaling that it won’t compromise €96 billion of its annual sales to China, or jeopardize the position of its largest companies on Chinese markets.

France says the same thing, and goes much, much further. In the run-up to G7, NATO and U.S.-EU summits, President Emmanuel Macron reminded Washington that the “European sovereignty” was at the heart of the French foreign policy. During his press conference on Thursday, June 10, he agreed that the EU and the U.S. shared common values, but that the EU must have its “strategic autonomy.”

Macron specifically referred to the case of China, where the EU had its own interests and its own views on the appropriate policy stance toward Beijing. He also mentioned that NATO, the trans-Atlantic military and political alliance, had nothing to do with China. In an obvious broadside at Washington, he also said that NATO needed clear rules of conduct, referring to virtually no consultation about the U.S. withdrawal from Afghanistan, and Turkey’s unilateral military operations.

French and German views may not be shared by the rest of the EU, but it is clear that the two countries are unlikely to follow Washington’s call to confront Russia and China in a way that would aggravate an already dangerously tense strategic situation in Europe, Middle East and the Indo-Pacific region.

Europe’s costly terms of endearment

Upon reflection, Washington could conclude that the French-German reluctance – in fact, an outright refusal – to follow an ominously belligerent approach to Russia and China is a blessing in disguise.

Indeed, by trying to broaden the front of democracies against the two “strategic competitors,” Washington is showing its own weakness to face the China’s challenge.

In doing so, the U.S. may also be reinforcing the image one regularly sees in European media of a country torn apart by internal strife along partisan, socio-economic, racial, religious and ethnic lines. That’s not an inspiring picture of a leader to follow.

Washington is also failing to read correctly the attitude of French and German political leaders of all stripes when it comes to following American party lines.

More than half of the French electorate is hostile to a perceived EU subservience to American influence. Macron’s main opponent in next year’s presidential elections says that the U.S. only has “vassals or targets for regime changes.”

Germany’s opposition to American bossing around literally exploded during the Trump years. A prominent German political analyst called Trump’s demand for Germany’s higher defense spending a “protection money” (a mafia Schutzgeld). And the U.S. ambassador to Germany was considered as an abrasive American proconsul, ordering an immediate stop to Nord Stream 2 gas pipeline from Russia. That particular project is still a major unresolved U.S.-German issue.

Washington’s terms of endearment with Europe are costly and time-wasting illusions. The “wake” should come in the course of ongoing summits – including, most importantly, during the meeting with Russia’s President Vladimir Putin at Geneva’s Villa La Grange on June 16.

Biden should talk to Putin and Xi

The U.S. does not need what the French call EU’s “conditional friendships” to settle its problems with Russia and China. President Joe Biden seems to realize that. He picked up the phone twice in recent months to call Putin, and had a long chat with his old “friend,” China’s President Xi Jinping, he met in 2012 to talk about the U.S.-China business. Biden knows well both of them, and, being a foreign policy specialist, he also knows what the problems are.

The meeting with Putin appears to have been well prepared. Both sides are downplaying expectations of any breakthrough, but chances of significant advances do exist.

Problems with China are more complex and considerably more dangerous. Much is being made of economic competition with China, but the fact that Pentagon cannot establish crises management lines with China’s defense officials says a lot about imminent dangers of “accidents” and “miscalculations” in the South China Sea, where massive American and Chinese naval and air assets keep operating in close proximity among China’s weaponized islets and artificial military structures.

China’s contested maritime borders and the management of Taiwan are the most flammable issues between the U.S. and China. Those are the long-standing problems where only Washington and Beijing can find appropriate solutions. Europe and Japan are just engaged and interested spectators of that difficult negotiating process.

On the economic front, the U.S. can help itself by balancing out its trade accounts with China. That should raise U.S. exports to China by half-a-trillion dollars a year, or slash China’s exports to America by a similar amount in case Beijing refused to cooperate. Either way, Washington should stop huge wealth and technology transfers to China via excessive and systematic trade deficits.

And to remain the world’s preeminent economic leader, the U.S. has to step up investments in infrastructure, education, science and healthcare to raise the economy’s potential and noninflationary growth rate to 3%-4%.

Washington should take the high road to Moscow and Beijing, instead of getting itself mixed up in vacuous talks about European “conditional friendships.”

_________________

*Dr. Michael Ivanovitch is an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York and taught economics at Columbia Business School.