Of the five main concentrations of economic and military power in the world today, the only one that is not a sovereign nation-state is Europe—which at once defines the chief problem facing this region as it moves toward the emerging Great Power system of the early twenty-first century. Even if our consideration of the continent’s future prospects excludes the Communist-controlled regimes in the east (as, for practical reasons, it must), we are still left with some states which are members of an economic-political organization (the EEC) but not of the chief military alliance (NATO), with others which adhere to the latter but not the former, and with important neutrals which are members of neither. Because of such anomalies, this section will focus upon the European Economic Community (and upon the policies of some of its leading members) rather than upon non-Communist Europe as a whole—for it is only in the EEC that an organization and structure exists, at least potentially, for a fifth world power.
But it is precisely because we are examining the EEC’s potential rather than its present reality that the problem of guessing what it may be like in the year 2000 or 2020 is compounded. In some ways the situation is similar to that which, on a smaller scale, faced the members of the German Federation in the mid-nineteenth century.85 A customs union existed which had proved to be so successful in stimulating trade and industry that it rapidly attracted new members, and it was clear that if that enlarged economic community was able to turn itself into a Power state it would be a major new actor in the international system—to which the established Great Powers would have to adjust accordingly. But so long as that transformation did not occur; so long as there were divisions among the members of the customs union about further economic integration and, still more, about political and military integration; so long as there were quarrels about which state should take the lead and disputes between the various parties and pressure groups about the benefits (or losses) accruing to them, then just so long would it stay divided, unable to realize its potential, and incapable of dealing as an equal with the other Great Powers. For all the differences of time and circumstance, the “German question” of the last century was a microcosm of the “European problem” of the present.
In its potential the EEC clearly has the size, the wealth, and the productive capacity of a Great Power. With the adherence of Spain and Portugal, its twelve-member population now totals around 320 million—which is 50 million more than the USSR and almost half as big again as the U.S. population. Moreover, it is a highly trained population, with hundreds of universities and colleges across Europe and millions of scientists and engineers. While its average per capita income conceals great gulfs—say, between West German and Portuguese incomes—it is much richer on the whole than Russia, and some of its member states are richer per capita than the United States. As was pointed out earlier, it is by far the largest trading block in the world, although much of that is intra-European trade. Perhaps a better measure of its economic strength lies in its productive output, in automobiles, steel, cement, etc., which puts it ahead of the United States, Japan, and (except in steel) the USSR. Depending upon the annual statistics, and upon the wild swings in the value of the dollar relative to European currencies over the past six years, the total GNP of the EEC is about equal (1980, 1986) to that of the USA, or about two-thirds as big (1983–1984 figures). It is certainly far larger than Russia, Japan, or China in its share of world GNP or manufacturing output.
In military terms also, the European member states are far from negligible. Taking only the four largest countries (West Germany, France, Britain, Italy) into account, one finds their combined regular-army size to be over a million men, with a further 1.7 million in reserves86—a total which is of course smaller than the Russian and Chinese armies, but considerably larger than the U.S. Army. In addition, these four states possess hundreds of major surface warships and submarines and thousands of tanks, artillery, and aircraft. Finally, both France and Britain possess nuclear weapons, and delivery systems—sea-based and land-based. The implications and effectiveness of these military forces will be discussed below; the point being made here is simply that, once combined, the totals are very substantial. What is more, the spending upon these forces represents around 4 percent of the GNP, as a rough average. Were those countries, or, more significant still, the entire EEC, spending around 7 percent of total GNP on defense, as the United States is today, the sums allocated would be equal to hundreds of billions of dollars—that is, roughly the same amount as the two military superpowers spend.
And yet Europe’s real power and effectiveness in the world is much less than the crude total of its economic and military strength would suggest—simply because of disunity. The armed forces, for example, not only suffer from a multitude of languages (a problem which the German Federation’s members never had to face), but are equipped with many different weapons and have very marked differences in quality and training—between, say, the West German and the Greek armies, or the Royal Navy and the Spanish navy. Despite NATO’s many attempts at standardization, one is still talking about a dozen armies, navies, and air forces of varying worth. But even those problems pale beside the obstacles at the political level, relating to the foreign and defense policy priorities of Europe. Ireland’s traditional (and anachronistic) stance on neutrality prevents the EEC from discussing defense issues—although even if discussions occurred, they would probably soon founder upon Greek objections. Turkey, with its substantial army, is not a member of the EEC; and the Turkish and Greek armed forces often seem more worried about each other than about the Warsaw Pact. France’s independent stance has (as will be seen below) military advantages and disadvantages; but it adds to the complications of consultation on defense and foreign-policy matters. Both Britain and France indulge in “out of area” operations and, indeed, still maintain an array of bases and troops overseas. For West Germany, the overriding defense issue—toward whichall its forces are geared—is the security of its eastern frontier. Evolving a unified European policy toward, say, the Palestinian issue, or even toward the United States itself, is inordinately complex (and often fails), because of the differing interests and traditions of each of the member states.
In terms of economic integration, and of the constitutional and institutional arrangements that exist to implement decisions in the economic field, the EEC is obviously much further ahead; even so, as an “economic community,” it is much more splintered than a sovereign state would ever be. Political ideology always affects economic policy and priorities. Coordination is difficult, if not impossible, when socialist regimes are in power in some of the member states and conservative parties are dominant in the others. Although the coordination of currencies is now more successful than it was, the occasional realignments which do take place (usually involving a revaluation of the German mark) are a reminder of the separate fiscal systems—and differentiated credit-worthiness—of the members. Despite proposals from the European Commission, there is as yet little progress toward a common European policy on a whole variety of issues, from full-scale airline deregulation to financial services. At too many of the common frontiers there are still customs posts, and lengthy checks, to the fury of the truck drivers. Even agriculture, the mainstay of the EEC’s spending functions and one of the few economic sectors where there is a “common market,” has proved to be a bone of contention. And if it is indeed likely that world foodstuffs production will continue to expand, with India and other Asian countries increasingly entering the export markets, the pressure to reform the EEC’s price-support system will build up, until the issue explodes into heated controversy again.
Finally, there is the persistent worry that after its postwar decades of economic growth and success, Europe is beginning to stagnate, and perhaps even to decline. The problems caused by the oil crisis of 1979—the steep rise in fuel prices, the pressure upon balance of payments, the general world depression in demand, output, and trade—seemed to hit the Europeans harder than many of the other major economies of the earth, as is indicated by Table 45.
Table 45. Growth in Real GNP, 1979–198387
(percent)
One of the chief concerns of the European states has been the effect of this slump upon employment levels—the number of people losing their jobs in western Europe in recent years has been much higher than at any time in the post-1945 era (for example, it leaped from 5.9 million to 10.2 million within the EEC between 1978 and 1982) and has shown little sign of coming down—which in turn swells the already extremely high level of social expenditures, leaving less for investment.88 Nor has there been anything like the creation of new jobs on the scale which has occurred in the United States (chiefly in low-paying service industries) and Japan (in high technology and services) as the 1980s have unfolded. Whether one ascribes this to the lack of business incentives, high costs and immobility of the labor market, and bureaucratic over-regulation (as right-wingers tend to do), or to the failure of the state to plan and invest sufficiently (as the Left usually sees it), or to a fatal combination of both, the result is the same. More alarming still, to many commentators, have been the signs that Europe is falling behind its American and (especially) its Japanese competitors in the high-technology stakes of the future. Thus, the 1984–85 Annual Economic Report of the European Commission warned:
The Community is now having to respond to the challenge of an emerging inferiority, by comparison with the United States and Japan, in industrial capacity in new and fast-growing technologies. … The deteriorating world trade performance of the Community in such fields as computers, micro-electronics, and equipment is now generally recognized.89
Quite possibly, this picture of “Eurosclerosis” and “Europessimism” has been painted too gloomily, for there are many other signs of European competitiveness—in quality automobiles, commercial and fighter aircraft, satellites, chemicals, telecommunications systems, financial services, etc. Nevertheless, the two most pressing issues remain in doubt. Is the EEC, because of the sociopolitical diversity of its members, as capable as its overseas competitors of responding to swift and large-scale shifts in employment patterns? Or is it designed more to slow down the impact of economic changes upon uncompetitive sectors (agriculture, textiles, shipbuilding, coal, and steel), and, in being so humane in the short term, disadvantaging itself in the longer term? And is the EEC capable of mobilizing the scientific and investment resources to remain a leading contender in the high-technology stakes, when its own companies are nowhere near as big as the American and Japanese giants, and when any “industrial strategy” has to be worked out, not by the likes of MITI, but by twelve governments (plus the EEC Commission), each exhibiting different concerns?
If one turned one’s attention from the EEC as a whole to a brief examination of the situation in which the leading three military/political countries of Europe find themselves, the sense of “potential” being threatened by “problems” is only reinforced. No state, arguably, manifests this ambivalence about the future more than the Federal Republic of Germany, in large part because of its inheritance from the past and the still “provisional” nature of the present structure of Europe.
Although many Germans fret about the economic prospects for their country by the early twenty-first century, that can hardly be regarded as the major concern (especially as compared with the economic difficulties facing other societies). While its total labor force is only a little higher than Britain’s or France’s, its GNP is significantly larger, reflecting an economy whose long-term productive growth has been extremely impressive. It is the largest producer in the EEC of steel, chemicals, electrical goods, automobiles, tractors, and (given Britain’s decline) even merchant ships and coal. Because of a remarkably low level both of inflation and of labor disputes, it has kept its export prices competitive, despite the frequent upward valuations of the deutsche mark—which are, after all, merely belated acknowledgments by other nations of West Germany’s better economic performance. A heavy emphasis upon engineering and design in the German management tradition (as opposed to the American emphasis upon finance) has given it an international reputation for quality products. Year after year, the German economy has notched up a surplus in its trade balances second only to Japan’s. Its international reserves are larger than those of any other country in the world (except, presumably, those of Japan after the latter’s recent surge), and the deutsche mark is often used by other nations as a reserve currency.
As against all this, one can point to those factors which give the Germans cause for Angst90 The EEC’s agricultural price-support system, long a drain for the German taxpayer, redistributes resources from the most competitive to the least competitive sectors of the economy—and not just in the Federal Republic itself (where there are a surprisingly large number of small farms), but to the peasantry of southern Europe. This has obvious social value, but it is a burden proportionately much larger than the protection given to American and perhaps even to Japanese agriculture. The persistently high level of unemployment, a sign that the Federal Republic still has too large a proportion of its work force in older industries, is also a major drain upon the economy, keeping social-security payments at a very high proportion of GDP; and while unemployment among the youth can be alleviated by the impressively broad level of training and apprenticeships, and will also be eased by the rapid aging of the German population, this latter trend is perhaps regarded with the greatest unease of all. If it is clearly an exaggeration to believe that the German race will “die out,” the steep decline in the birth rate will have obvious repercussions upon the German economy when an even larger share of the population consists of old-age pensioners. Along with this demographic fear goes the much less tangible worry that the “successor generation” will not want to work as earnestly as those who rebuilt Germany from the wartime ashes, and that with higher wage costs and far shorter working weeks than the Japanese, even German productivity growth will not keep up with the challenge from the Pacific basin.
Even so, none of those problems are insuperable, provided the Germans can maintain their “package” of low inflation, quality goods, high investment in new technology, superior design and salesmanship, and labor peace. (At the very least, one can say that if the problems named above affect the German economy, how much more will they hurt the economies of most of its less competitive neighbors!) What is much more difficult to forecast is whether the extraordinarily complex and quite unique contours of the “German question” as they have existed since the late 1940s will continue unchanged into the twenty-first century: that is, whether there will continue to be two “Germanies,” separated by hostile alliances, despite the growing intimacy between them; whether the NATO alliance (of which the Federal Republic is such a central part) can defend the German lands without destroying them, should East-West relations worsen into hostilities; and whether, in the event of a diminution in American power and a reduction of its forces in Europe, Germany and its major EEC/NATO partners can provide an adequate substitute for the U.S. strategic umbrella which has served so well for the past forty years. None of these interrelated issues are crying out for an immediate solution, but all of them are giving thoughtful observers grounds for concern.
The “German-German” relationship will probably seem, at this time, the most hypothetical of the cluster. As has been made clear in the preceding chapters, the proper place of the German people within the European states system has troubled statesmen for at least the past century and a half.91 If all those speaking the German tongue are brought together as one nation-state—as has been the European norm for nearly two centuries—the resultant concentration of population and industrial might would always make Germany the economic power center of west-central Europe. That itself need not necessarily turn it into the dominant military-territorial force in Europe as well, in the way that the imperialism of both the Wilhelmine and (even more) the Nazi eras led to a German bid for hegemony. In a bipolar world which, militarily, is still dominated by Washington and Moscow, in an age when major Great Power aggressions run the risk of triggering a nuclear war, and with a post-1945 “de-Nazified” generation of German politicians running affairs in Bonn and East Berlin, the notion of any future Germanic bid for “mastery in Europe” seems anachronistic. Even were it attempted, the balance of European (let alone global) power would prevail against it. In abstract terms, therefore, there is surely nothing wrong and a lot that is right with permitting the 62 million “West” Germans and 17 million “East” Germans to reunite, particularly when each population increasingly perceives that it has more in common with the other than with its superpower guardian.
Yet the tragic fact is that however logical that solution is in one sense—and however much the two German peoples are showing signs (despite the ideological gulf) of their common inheritance and culture—the present political realities speak against it, even if it took the form of a loose Germanic federation on the nineteenth-century model, as has been ingeniously suggested.92 For the blunt fact is that East Germany serves as a strategical barrier for the Soviet control over the buffer states of eastern Europe (not to say the jump-off position for a move to the west); and since the men in the Kremlin still think in terms of imperialist Realpolitik, letting the German Democratic Republic gravitate toward (and into) the Federal Republic would be regarded as a major blow. As one authority has recently pointed out, based on present forces alone, a unified Germany could field over 660,000 regular troops plus 1.5 million paramilitary and reservists. The USSR could not view with equanimity a unified German nation with an army of 2 million on its western flank.93 On the other hand, it seems difficult to see why a peacefully united Germany should want to maintain armed forces of that size, forces which reflect present Cold War tensions. It is also difficult to believe that despite its heavy-handed emphasis upon the lessons of the Second World War, even the Soviet leadership accepts its own propaganda about German revanchism and neo-Nazism (which has been an increasingly difficult position to maintain since Willy Brandt’s period of office). But what is also clear is that Moscow has a congenital dislike of withdrawing from anywhere, and also worries deeply about the political consequences of a reunited Germany. Not only would it be a formidable economic Power in its own right—with a total GNP dangerously close to the USSR’s own, at least in formal dollar-equivalent terms—but it also would act as a trading magnet for all of its eastern European neighbors. Even more fundamental a point: how could Russia withdraw from East Germany without provoking the question of a similar withdrawal from Czechoslovakia, Hungary, and Poland—leaving as the USSR’s western frontier the dubious Polish/Ukrainian borderline, which is temptingly close for the fifty million Ukrainians?
What remains, therefore, is a state of suspended animation. Intra-German trade relations are likely to grow (clouded only by the occasional tension between the superpowers); each German state is likely to become relatively more productive and richer than its neighbors; each will swear loyalty to its supranational military (NATO/Warsaw Pact) and economic (EEC/Comecon) organizations while making special arrangements with its Germanic sister state. It is impossible to forecast how Bonn would react should the Soviet Union itself be shaken and upset from within—and should that coincide with serious unrest in the German Democratic Republic. It is also impossible to forecast how the “East” Germans would react if there was to be a Warsaw-Pact offensive westward. Certainly, the special Soviet “control” arrangements over the Democratic Republic’s army, and the shadowing of every one of its divisions by a Russian motor-rifle division, suggest that even the grim men in the Kremlin worry about setting German against German—as well they should.
But the more concrete and immediate problem which the Federal Republic faces—and has faced since its existence—has been to discover a viable defense policy in the event of a war in Europe. From the beginning (see pp. 378–79), the apprehension that a vastly superior Red Army could strike westward without much hindrance led both the Germans and their fellow Europeans to rely upon the U.S. nuclear deterrent as their chief security. Ever since the USSR acquired the capacity to hit the American homeland with its own ICBMs, however, that strategy has been in doubt—would Washington really begin a nuclear interchange in response to a Russian conventional attack on the northern German plain?—even if it has never been officially abandoned. This is also true of the related question of whether the United States would unleash strategic nuclear attacks against the Soviet Union (again, inviting reprisals upon its own cities) if the Russians contented themselves with firing short- or intermediate-range missiles (SS-20s) solely at European targets. There has been, to be sure, no lack of proposals for creating a “credible deterrent” to meet such contingencies: installing Pershing II and various forms of cruise-missile systems to counter the Russian SS-20s; producing an enhanced-radiation (or “neutron”) bomb, intended to kill off invading Warsaw Pact troops without damage to buildings and infrastructure; and—in the French case—reliance upon a Paris-controlled deterrent force as an alternative to an uncertain American defense system. All of these, however, have their own attendant problems;94 and, quite apart from the political reactions which they provoke, each of them points to the uniquely contradictory nature of nuclear weapon systems—that having recourse to them is more than likely to lead to the destruction of that which one wishes to defend.
It is scarcely surprising, therefore, that while successive West German administrations have paid lip service to the value of NATO’s nuclear-deterrence strategy, and have foresworn the acquisition of nuclear weapons for themselves, they have been to the fore in the creation of a strongconventional defense system. As it is, the Bundeswehr has not only the largest of the NATO armies in Europe (335,000 troops, with 645,000 trained reserves)95 but also one of extremely high quality and with good equipment; provided it did not lose command of the air, it would give an impressive account of itself. On the other hand, the steeply declining birthrate makes it increasingly difficult to maintain the Bundeswehr at full strength, while the government’s desire to keep defense spending down to 3.5 to 4 percent of GNP means that it will be difficult for the armed services to procure as much new equipment as they need.96 At the end of the day, such weakness can be overcome—just as the deficiencies in the less-well-equipped Allied armies stationed in West Germany could be overcome, given the political will. However, this still leaves the Germans facing the uncomfortable (for some, intolerable) dilemma that any outbreak of large-scale hostilities in central Europe would lead to incalculable bloodshed and material loss on their territory.
It is not surprising, therefore, that since at least the time of Willy Brandt’s chancellorship the government in Bonn has been to the fore in its pursuit of détente in Europe—and not merely with its German sister state, but also with eastern European nations and with the USSR itself, in an endeavor to calm their traditional fears of a too-strong Germany; and that it, more than all its NATO partners, has partaken in and financed East-West trade in the Cobdenite belief that economic interdependence makes war more difficult (and also no doubt because West German banks and industries are so favorably placed to take advantage of that commerce). This does not imply a move into “neutralism” for the two Germanies—as is sometimes proposed by left-wing Social Democrats and the Green Party—for that would depend upon securing Moscow’s consent to East German neutralism as well, which is highly unlikely. What it does mean is that West Germany sees its security problem concentrated almost exclusively in Europe and shuns any “out-of-area” capability—let alone the occasional extra-European actions in which the French and British still indulge. By extension, therefore, it dislikes being forced to take a position on the (in its view) distracting and distant issues in the Near East and farther afield, and that in turn leads it into disagreements with a U.S. government which feels that the preservation of western security cannot be so neatly limited to central Europe. In its relationship to Moscow and East Berlin on the one hand and to non-European issues on the other, West Germany finds it difficult if not impossible to conduct a merely bilateral diplomacy; it must, instead, have regard for the reactions of Washington (and, often, of Paris). That, too, is a price which has to be paid for its awkward and unique position in the international power system.97
If the Federal Republic finds the economic challenges less intractible than foreign- and defense-policy problems, the same cannot be said for the United Kingdom. It, too, is the legatee of a historical past—and, of course, of a geographical position—which strongly influences its policy toward the world outside. But, as we have seen in earlier chapters, it is also the country among the former Great Powers whose economy and society have found it hardest to adjust to the shifting patterns of technology and manufacturing in the post-1945 decades (and in many respects in the decades before). The most devastating impact of the global changes has been upon manufacturing, a sector which once earned Britain the title “workshop of the world.” It is true that among many of the advanced economies of the world, manufacturing’s share of output and employment has been steadily shrinking while other sectors (e.g., services) have grown; but in Britain’s case the fall has been much more precipitous. Not only has its proportion of world manufacturing output continued its remorseless decline relatively, but it has also decreased absolutely. More shocking still has been the abrupt switch in the place of manufactures in Britain’s foreign trade. While it may be difficult to prove The Economist’s tart observation that “since 1983, Britain’s trade balance on manufactures has been in deficit for the first time since the Romans invaded Britain,” it is a fact that even in the late 1950s exports of manufactures were three times as big as imports.98Now that surplus has gone. What is more, the decline in employment occurs not only in older industries but also in the “sunrise” high-technology firms.99
If the fall in Britain’s manufacturing competitiveness is a century-old tale,100 it has clearly been accelerated by the discovery of North Sea oil, which while producing earnings to cover the visible trade gap has also had the effect of turning sterling into a “petrocurrency,” sending its value to unrealistically high levels for a while and making many of its exports uncompetitive. Even when the oil runs out, causing sterling to decline further, it is not at all clear that that would ipso facto lead to a revival in manufacturing: plant has been scrapped, foreign markets lost (perhaps permanently), and international competitiveness eroded by higher than average rises in unit labor costs. Britain’s shift into services is somewhat more promising, but it nonetheless remains as true here as in the United States that many services (from window cleaning to fast food) neither earn foreign currency nor are particularly productive. Even in the expanding, high-earning fields of international banking, investment, commodity dealing, and so on, it seems clear that the competition is, if anything, more intense—and in the past thirty years “Britain’s share of world trade in services has fallen from 18 percent to 7 percent.”101 As banking and finance become a global business, increasingly dominated by those (chiefly American and Japanese) firms with massive capital resources in New York and London and Tokyo, the British share may diminish further. Finally, future developments in telecommunications and office equipment are already suggesting that white-collar jobs may soon follow the path already trodden by blue-collar workers in the West.
None of this, one hopes, portends a cataclysm. A general growth in world output and trade would help to keep the British economy afloat, even if its share of the whole gently declined and its per capita GNP was steadily being overtaken by many more nations, from Italy to Singapore. The decline could intensify, if a change of government led to large increases in social spending (rather than productive investment), higher taxation levels, a drop in business confidence, and a flight from sterling; it might slow down, with a government which adopted a less strict monetary policy, evolved a coherent “industrial strategy,” and cooperated with fellow Europeans in marketable (and nonprestige) ventures. It also may be true, as one economist maintains,102 that British manufacturing is now altogether leaner, fitter, and more competitive, having undergone an “industrial renaissance.” But the auguries for a spectacular turnaround are not good; the relative immobility and lack of training in the labor market, the high unit costs, and the comparative smallness of even the largest British manufacturing firms are very considerable handicaps. The output of engineers and scientists is still dismally low. Above all, there is the poor level of investment in R&D: for every $1 spent in Britain on R&D in the early 1980s, $1.50 was spent in Germany, $3 in Japan, and $8 in the United States—yet 50 percent of that British R&D was devoted to nonproductive defense activities, compared with Germany’s 9 percent and Japan’s minuscule amount.103 By contrast with its chief rivals (except the United States), British R&D is both much less related to industry’s needs and much less paid for by industry itself.
The large proportion devoted to defense-related R&D brings us onto the other horn of the British dilemma. If it was an unambitious, obscure, isolated, pacific state, its slow industrial anemia would be a pity—but irrelevant to the international power system. Yet the fact is that, although much shrunken from its Victorian heyday, Britain still remains—or claims to be—one of the leading “midsized” Powers of the globe. Its defense budget is the third- or fourth-largest (depending upon how one measures China’s total), its navy the fourth-largest, its air force the fourth-largest104—all of which, it might be thought, is significantly out of proportion to its geographical size (a mere 245,000 square kilometers), its population (56 million) and its modest, declining share of world GNP (3.38 percent in 1983). Furthermore, despite its imperial sunset, it still has very extensive strategical commitments abroad: not only in the 65,000 troops and airmen in Germany as its contribution to NATO’s Central Front, but also in garrisons and naval bases across the globe—Belize, Cyprus, Gibraltar, Hong Kong, the Falklands, Brunei, the Indian Ocean. Despite all the premature announcements, it is still not one with Nineveh and Tyre.105
This divergence between Britain’s shrunken economic state and its overextended strategical posture is probably more extreme than that affecting any other of the larger Powers, except Russia itself. It therefore finds itself particularly vulnerable to the fact that weapon prices are rising 6 to 10 percent faster than inflation, and that every new weapon system is three to five times costlier than that which it is intended to replace. It is made the more vulnerable in consequence of domestic-political constraints upon defense spending; while Conservative administrations feel it necessary to contain arms spending in order to reduce the deficit, any alternative regime would feel inclined to chop defense expenditures in absolute terms. Quite apart from this political dilemma, however, there looms for Britain a fundamental and (soon) unavoidable choice: either to cut allocations to all of the armed services, placing each of them in a less than effective state; or to cut some of the nation’s defense commitments.
Yet as soon as that proposition is stated, the obstacles emerge. Command of the air is taken to be axiomatic (hence the RAF’s superior budget), even while the cost of new Euro-fighters is spiraling out of sight. By far the greatest British overseas commitment is to Germany and Berlin (almost $4 billion), but even now those 55,000 troops, 600 tanks, and 3,000 other armored vehicles are, despite high morale, underprovisioned. However, any reduction in the size of the BAOR (British Army on the Rhine) or fancy-footwork scheme to keep half the troops in British rather than German garrisons is likely to trigger off such political repercussions—from German grief, to Belgian emulation, to American annoyance—that it could be totally counterproductive. A second alternative is to reduce the size of the surface fleet—the Ministry of Defence solution of 1981. until the Falklands crisis upset that scheme.106 But while such an alternative probably has the most advocates in Whitehall’s corridors of power, it looks ill-timed in the face of Russia’s rising naval challenge and the increasing American emphasis upon NATO having an “out-of-area” thrust. (And it is certainly a contradiction for the advocates of enhancing NATO’s conventional forces in Europe to agree to reductions in the alliance’s second-largest fleet of Atlantic escorts.) A more possible candidate for “cuts” would be Britain’s expensive and (while emotionally understandable) vastly overextended commitments in the Falkland Islands: but even that retrenchment would probably only postpone a longer decision for several years. Finally, there is the investment in the very expensive Trident submarine-based ballistic-missile system, the costs of which seem to rise month by month.107 Given the Conservative government’s enthusiasm for an advanced and “independent” deterrent system—not to mention the way in which the Trident boats may actually be altering the overall nuclear balance (see below, p. 506)— that decision is only likely with a radical change of administration in Britain, which in turn might throw more than future defense policy into question.
At the end of the day, however, the awkward choice is there. As the Sunday Times has put it, “Unless something is done soon, this country’s defense policy will increasingly consist of trying to do the same job with less money, which can only be bad for Britain and NATO.”108 This leaves the politicians (of any party) with the alternative of reducing certain commitments, and enduring the consequences thereof; or of increasing defense expenditures still further—and Britain spends proportionately more (5.5 percent of GNP) than any other European NATO partner except Greece—and thereby reducing its own investment in productive growth and its long-term prospects for an economic recovery. As with most decaying Powers, there is only a choice of hard options.
The same dilemma confronts Britain’s neighbor across the Channel, even if that has been concealed by the lack of sustained domestic questioning of France’s defense policy, and by a significantly better (if still flawed) economic performance since the 1950s. At the end of the day, Paris, like London, has to grapple with the problem of being only a “midsized” Power with extensive national interests and overseas commitments, the defense of which is coming under steadily increased pressure from escalating weapon costs.109 While its population is the same as Britain’s, its total GNP and its per capita GNP are larger. The French produce more cars and more steel than the British and have a very large aerospace industry. Unlike Britain, France remains heavily dependent upon imported oil; on the other hand, it still runs a considerable surplus in agricultural goods, which are heavily subsidized by the EEC. In a number of significant high-technology fields—telecommunications, space satellites, aircraft, nuclear power—the French have shown a strong commitment to keeping abreast with worldwide competition. If France’s economy was badly dented by the Socialist administration’s dash for growth in the early 1980s (just when all its major trading partners were retrenching fiscally), the stricter policies which followed seem to have reduced inflation, cut the trade gap, and stabilized the franc, all of which ought to allow for a resumption in French economic growth.
But whenever France’s economic structure and prospects are compared with those of its powerful neighbor across the Rhine—or with Japan’s—the precariousness shows through. While France is still spectacularly adroit in exporting fighter aircraft, wines, and grain, it “remains relatively weak in selling run-of-the-mill manufactured goods abroad.”110 Too many of its customers have been unstable Third World countries that order lavish projects like dams or Mirages and then have difficulty paying for them; by contrast, the “import penetration” of industrial goods, automobiles, and electrical appliances into France indicates broad fields where it is not competitive. Its trade deficit with West Germany grows year by year and, since French prices always rise faster than those in Germany, will in all probability lead to further devaluations of the franc. The northern landscape of France is still scarred with decaying industries—coal, iron, steel, shipbuilding—and much of its automobile industry is also feeling the strain. And while the new technologies seem full of promise, neither can they absorb France’s many unemployed nor are they receiving the levels of investment necessary to keep pace with German, Japanese, and American technologies. More worrying still for a country as economically (and, of perhaps greater import, psychologically) attached to agriculture is the looming crisis of global overproduction of grains, dairy produce, fruit, wine, etc.—with its increasing strain upon French and EEC budgets if farm-support prices are maintained and its threat of social unrest if prices are cut. Until a few years ago, Paris could rely upon Community funds to aid in restructuring agriculture; now, most of that cash is likely to go to the peasants of Spain, Portugal, and Greece. All this may leave France without the capital resources necessary for a much larger R&D effort and for sustained, high-tech-based growth over the next two decades.
It is in this larger context, of fixing priorities for France’s future, that one needs to view the debate over national defense policy. In many ways, there is much that is impressive about French strategy, and military actions, in recent times. Recognizing (and assertively voicing) the increasing doubts about the credibility of the American strategic nuclear deterrent, France has provided itself with its own “triad” of delivery systems for use in the event of Soviet aggression. By keeping in its own hands every aspect of its nuclear deterrent (from production to targeting), and by insisting that its entire force of missiles will be loosed at Russia if deterrence fails, Paris feels it has a more certain way of holding the Kremlin in check. At the same time, it has maintained one of the largest land armies and has a substantial garrison in southwestern Germany and a commitment to come to the Federal Republic’s aid; while being outside the NATO command structure, and thus able to proffer an independent “European” voice on strategic issues, it has not dislocated the military need for reinforcing the Central Front in the event of a Russian attack. The French have also maintained an extra-European role and—by means of occasional military interventions overseas, the presence of their garrisons and advisers in Third World countries, and their successful arms-sales policy—offered an alternative influence (and source of supply) to either the USSR or the United States. If this has sometimes irritated Washington—and if French nuclear testing in the South Pacific has rightly annoyed the countries of that region—then Moscow in its turn can hardly be comforted by the various and sometimes unpredictable displays of Gallic independence. Furthermore, since both the right and the left in France support the idea of the nation’s playing a distinct role abroad, French claims and actions for that purpose do not provoke the domestic criticism which would occur in virtually all other Western societies. All this had led foreign observers (and, of course, Frenchmen themselves) to describe their policy as logical, hard-nosed, realistic, and so on.
Yet the policy itself is not without its problems—as some French commentators are beginning openly to admit111—and must cause the historically minded to recall the gap which existed between the theory and the reality of France’s defense policy prior to 1914 and 1939. In the first place, there is a great deal of truth in the cold observation that all of France’s posturings of independence have taken place behind the American shield and guarantee to western Europe, both conventional and nuclear. A Gaullist policy of assertiveness was only possible, Raymond Aron pointed out, because for the first time in this century France was not in the front line.112 But what if that security disappears? That is, what if the American nuclear deterrent is admitted to be non-credible? What if the United States, over time, steadily pulls back its troops, tanks, and aircraft from Europe? Under certain circumstances, both of those eventualities might be seen as welcome. Yet, as the French themselves admit, they can hardly appear so in the light of Moscow’s recent policies: steadily building up its own nuclear and European-based conventional forces to excessive levels, keeping a tight hold upon its eastern European satellites, and launching “peace offensives” designed perhaps particularly to wean the West German public out of the NATO alliance and into neutralism. Many of the signs of what has been termed France’s “New Atlanticism”113—a stiff er tone toward the Soviet Union, criticism of neutralist tendencies among the German Social Democrats, the Franco-German agreement for the forward deployment in Germany (possibly with tactical nuclear weapons) of the Force d’Action Rapide, the closer links with NATO114—are obvious consequences of French concern about the future. Until Moscow changes, Paris is bound to worry that the USSR might move into western Europe when (or even before) the United States has moved out.
But if that threat became more likely, what could France do about it in practical terms? Naturally, it could increase its conventional forces still further, moving toward the creation of an enhanced Franco-German army strong enough to hold off a Russian assault even if U.S. forces were diminished (or even absent). In the view of people like Helmut Schmidt,115 this is the logical extension not only of the Paris-Bonn entente but also of international trends (e.g., the weakening of American capacities). There are all sorts of political and organizational difficulties in the way of such a scheme—ranging from the possible attitude of a future left-of-center German administration, to questions of command, language and deployment, to the touchy issue of French tactical nuclear weapons116—but in any event such a strategy is likely to founder upon one insuperable reef: lack of money. France is currently spending about 4.2 percent of its GNP upon defense (compared with the United States’ 7.4 percent and Britain’s 5.5 percent), but given the delicate state of the French economy, that percentage cannot be increased by very much. Moreover, France’s independence in atomic-weapons development means that its nuclear strategic forces absorb up to 30 percent of the defense budget, far more than elsewhere. What is left is not enough for the AMX battle tank, advanced aircraft, the new nuclear-powered aircraft carrier, “smart” battlefield weapons, and so on. While certain increases in the French armed forces may be likely, that could not possibly satisfy all requirements.117 Just as in Britain’s case, therefore, the French are being faced with the awkward choice of either eliminating some weapon systems (and roles) entirely or forcing economies upon all of them.
Equally worrying are the doubts being raised about France’s nuclear deterrent, both at the technical and the (related) strategical level. Parts of the triad of French nuclear weaponry—the land-based missiles, and especially the aircraft—suffer from deterioration over time and even their costly upgrading and modernization may not keep pace with newer weapons technology.118 This problem may become particularly acute if significant breakthroughs occur in American Strategic Defense Initiative (SDI) technology, and if the Russians in their turn develop a much larger system of ballistic-missile defense. Nothing is more disturbing, from the French viewpoint, than the two superpowers enhancing their potential invulnerability while Europe remains exposed. As against this, there is the significant buildup of the French submarine-launched ballistic-missile system (discussed below, p. 506). However, the general principle remains: advanced technology could render useless existing types of weaponry, and certainly will make the cost of any replacements much more expensive. In any case, the French are caught in the same trap of credibility as all of the other nuclear Powers. If Paris thinks it increasingly unlikely that the United States would risk a strategic nuclear exchange with the USSR because the German frontier had been invaded, how likely is its own promise to “go nuclear” on behalf of the Federal Republic? (The West Germans hardly believe it.) Even the Gaullist tradition of defending the “sanctuary” of France by firing off all its missiles at Russia hangs upon the unproven assumption that the French people prefer obliteration to a possible (or likely) defeat by conventional means. “Tearing an arm off the Russian bear” has always sounded like a good phrase, until it is remembered that one will certainly be devoured by the bear; and that Russia’s own antimissile defenses may limit the damage it will suffer. Obviously, the official posture of French nuclear strategy is not going to be altered soon, if at all. But it is worth wondering how realistic it is, should the East-West balance worsen and the United States weaken.119
France’s problem, then, is that so many demands are pressing upon its own modest national resources. Given demographic and structural-economic trends, the high share of national income consumed by social security is likely to continue, and probably increase. Large funds may soon be needed for the agricultural sector. At the same time, the modernization of the armed forces requires substantial amounts of money. Yet all of these have to be balanced against—and take away from—the pressing need for vastly enlarged investment in R&D and in advanced industrial processes. If it cannot allocate the monies necessary for the last-named purpose, it will over time put into jeopardy the prospects of affording defense, social security, and all the rest. Obviously this dilemma is not France’s alone, although it is the French above all who have argued for a distinctively “European” position on international economic and defense issues—and who therefore most clearly articulate European concerns. For this reason, too, it is Paris which has usually taken the lead in initiating new policies—deepening Franco-German military ties, producing European Airbuses and satellites, and so on. Many of these schemes have met with skepticism among France’s neighbors at this Gallic fondness for bureaucratic planning and prestige endeavors, or with the suspicion that French companies are likely to be awarded the lion’s share of Euro-funded projects. Other schemes, however, have already proved their worth or seem to hold a rich promise.
Europe’s “problems” are, of course, more than those considered here: they include aging populations and aging industries, ethnic discontents in the inner cities, the gap between the prosperous north and the poorer south, the political/linguistic tensions in Belgium, Ulster, and northern Spain. Pessimistic observers also occasionally allude to the possibility of a “Finlandization” of certain European states (Denmark, West Germany), which would then become dependent upon Moscow. Since that development could only follow from a leftward political shift in the countries concerned, it is difficult to estimate its likelihood. As it is, if one considers Europe—as represented chiefly by the EEC—as a power-political unit in the global system, the most important issues it faces are clearly those discussed above: how to evolve a common defense policy for the coming century which will be viable even in what may be an era of significant change in the international power balances; and how to remain competitive against the very formidable economic challenges posed by new technology and new commercial competitors. In the case of the other four regions and societies examined in this chapter, it is possible to suggest what changes are likely to occur over time in their present position: that Japan and China will probably see their status in the world enhanced, and that the USSR and even the United States will see theirs eroded. But Europe remains an enigma. If the European Community can really act together, it may well improve its position in the world, both militarily and economically. If it does not—which, given human nature, is the more plausible outcome—its relative decline seems destined to continue.