Notes and Queries III

European Disadvantage, the New Great Power Politics and the Nuclear Long Game

Studying the expected relative scale of the components of the global economy next year does not necessarily tell you where hard power lies today but it will indicate where power is likely to lie in the future and it forces us to think about why what should be powerful is not. This is highly relevant to assessment of the potential for European hard power. The relatively recent but sustained shift of economic power towards Asia is fairly obvious but Asia does not just mean China. The US remains ‘top dog’ when you take into account the spread of its influence and relations through its evident dominance in finance capital and technological innovation. At this point in history, although the long term trajectory favours China, there is widespread over-estimation of China’s power and under-estimation of that of America - but even Donald Trump sees the writing on the wall if history is not managed going forward, at least without the impossible and self-defeating solution of direct military confrontation. That moment, if ever it existed, has now passed to the chagrin of some of the crazies in Congress and the think tanks.

European Weakness Despite Economic Strength

On the day following the meeting in South Korea between Presidents Xi and Trump, the logic of co-dominion (albeit with China still as ‘junior partner’) over the global system between Washington and Beijing is now there for all to see. However, what is equally interesting is that a) Europe (not China) is still the second global power economically if it is taken as a whole and yet b) its internal fragmentation means that it is a cypher when it comes to holding strategic or hard power. Russia is not economically any more significant than, say, Brazil or Saudi Arabia yet it is running Brussels ragged and set to win its admittedly localised war in Ukraine.

Even India and Japan are considerably less significant than Europe economically. The former two are now at much the same economic level albeit with a long way to go for India to become a true superpower. Japan has declined in relative (not absolute) importance over fifty years while India is constantly raising itself so the picture will change again in another 20-30 years. This is a relatively brief moment where the US still has the advantage and the polyglot European Union should have had one but does not. Washington may well come out of this transitional period as continued ‘top dog’ but Europe will not. Its inability to deal with current challenges almost certainly means that it will continue to fall behind in the decades to come.

The question becomes what the US’ strategic interest in Europe is to be under these conditions. In the pre-2008 era it used to be one of ensuring Europe remain as the eastern wing of a joined up West with Japan as the western wing back (from an American geographical perspective) but that no longer applies. The US-Europe-Japan tripartite economic and security axis came to looki increasingly disadavantageous to the US as the US took up all the burdens of strategic hard power delivery and as the two wings exploited their free trade position to America’s disadvantage. The theory was that it was in the American imperial interest to have a massively stable ‘West’ countering all rising future non-Western powers. This has now been replaced with a model that effectively jettisons the ‘West’ conceptually (which neo-conservatives and Atlanticists alike are having difficulty comprehending) in favour of America First and of building new pragmatic bilateral relations with significant non-Western players. The old alliances are certainly not dead but the allies no longer get a free ride on an empire whose debt mountain was becoming (and still is) an increasingly risky proposition.

The very recent RAND report shifting intellectual opinion on China relations considerably was ‘an accident waiting to happen’ as far as Europe is concerned because one awkward conclusion at the implications of shifts in economic power is that Washington’s real long term challenger may not actually be China but could be the European Union if it ever got its act together. Fortunately for Washington, Europe is run by relative amateurs when it comes to grand strategy. Encouraging continued political fragmentation within Europe without allowing it to implode completely is not a bad strategy for American interests given that a unified political and strategic liberal internationalist bloc on the other side of the Atlantic might prove to be a very difficult equal to a populist Republican administration. The UK has already been abstracted from the whole and turned into a de facto economic colony (51st State) of the US. Abstracting both the UK and Russia from the European project (equally the result of ‘own goals’ of inflexible or paranoid thinking within the European Project) pushes Europe into third place as one of the three great global powers automatically not least because Europe is denying itself access to a massive natural resources basis in Eurasia at exactly the point where the incoming digital and energy-based industrial revolution requires this more than ever.

US and China - Why They Are The Only Players Now

The US still has (in effect), as part of its trading network regardless of tariffs, most of non-Chinese Asia and Australasia (although it competes here with China sometimes to China’s advantage), that part of the Middle East that matters (the Gulf) and half of Latin America (which it is busy trying to bully into total regional compliance). Africa is only a theoretical potential for the future and does not represent the prospect of actual current growth of consequence. Africa is a place where everyone else either dabbles (Russia, China, Gulf), has lost interest (US) or is distracted (Europe). In our view, the new ‘realism’ in Washington is very disruptive but it seems to be giving the ‘imperium’ a new lease of life rather than weakening it albeit at the price of taking enormous risks, any one of which could unravel that imperium very quickly indeed. New boundaries are being drawn, new partnerships being considered and future rivalries (notably that with the EU) anticipated and dealt with. Contrast the rhetorical outcome of the Xi-Trump bilateral meeting (and indeed the Alaska Summit with Putin) with the curious meeting in the White House with European leaders where they all looked like a bunch of submissive satraps and courtiers and with the obvious and rather justifiable lack of respect in Washington for Von Der Leyen and Kallas.

Having said that, the media can be very awkward because they can sometimes ‘investigate’ (often on a tip-off) things that indicate deliberate discrepancies between rhetoric and actuality. For example, the Associated Press has inconveniently ‘investigated’ tolerated loopholes in tech trades with China. Now somebody is going to have to close loopholes that were almost certainly there for a reason! This question of whether China is the ‘enemy’ is still a sticky one - neo-conservatives and many liberal internationalists and some populists are determined that it is - but there is a definite difference between seeing China as an economic predator (populist) and the continued half-baked lunacy of seeing China as imminent and permanent threat to Bexhill-on-Sea or Jackson, Wyoming. There is a clear cognitive dissonance between what the political and media class of the West, always operating on tram lines, thinks is going on and what is actually going on at the heart of the empire.

There is, for example, a huge spat in the UK as conservatives point out the refusal of the Government to disrupt relations with Beijing by defining it as ‘threat’ or ‘enemy’. Most Governments including the US seem to see no advantage and much cost to upsetting Beijing unnecessarily with such aggressive language just to placate often unhinged legislators and securocrats. This ‘internal contradiction’ within the West sometimes gets exposed through an unsophisticated and excitable media. The recent RAND report on Sino-US relations (see above) now appears to be part of a campaign to re-educate the media into understanding that confrontation is not helpful and that problems can be resolved through dialogue. This is not what a lot of people expected of Trump based on 2024 Campaign rhetoric (although it can be proved consistent if we separate economic negotiation from any will to military confrontation). The conservative Right is constantly being blind-sided by actions that appear to contradict historic rhetoric but which merely demonstrate the limited intellectual capacity of the average war hawk still lodged in the recent past with its long Cold War tail.

Yet all of this becomes moot within a decade because matters will be decided not so much by current trading and economic patterns as by who owns the new digital industrial revolution (partially fuelled by a carefully manufactured military-industrial paranoia), who has the energy and raw material resources to sustain it and whether the current ‘capitalist’ model crashes and burns on its own exuberance or is delayed by a failure to mobilise the vast sums of necessary capital. This is where Europe is rapidly falling behind and, in a consummate act of stupidity, has entirely cut itself off from the cheap energy and raw materials assets of Eurasia during a period of difficult and politically and socially risky transition. In this ‘future case’ in which the transition is from one mode of industrial production to another, the main, perhaps only, players are the US and China operating different systems of capital accumulation under different political structures but both driving faster than anyone else towards a radical new future. European fragmentation alongside under-capitalisation in the rest of the world means that there are few or no rivals to the US and China in this respect and that some nations may do well but only as service or capital providers to the main engines of growth (that is, the UK, the Gulf and Israel to the US and Russia to China).

The Inevitability of Peace in Ukraine

A rapid unification of Europe and its transformation into a centralised State could change the situation but this looks politically unlikely on the necessary time-scale as individual nation states push back against such a project for domestic political reasons and because they all have different strategic aims.⁩ As to the postponed Budapest Meeting which is a sine qua non of European ability to access Eurasian resources and get back on track, there is some hope of peace but the process is going to be long drawn out while the Americans and Chinese increase their lead in radical innovation at an almosty exponential pace month on month. The trajectory towards peace is becoming ever more clear even if European centrist leaders are in denial and, in being in denial, effectively cutting their own economic and possibly political throats for abstract principles. Trump and Putin want this ‘Budapest’ meeting but they cannot reasonably have it until the Europeans (who are all over the place) comprehend the fundamental point that any settlement cannot be a ceasefire or holding operation only to see the conflict erupt again under different political conditions. It must be a total European security agreement that halts the possibility of war altogether by mutual consent.

The problem is thus not actually on the Russian side (since it is Moscow that constantly pushes for such a total security agreement) but on the Euro-Ukrainian side which is still fighting a war based on ideological principles that are now only held by Europeans, small nations, stubborn neo-conservatives, romantic utopian ‘socialists’ and ageing liberal internationalists now that Trump is in the White House. Many European interests still want or need war on the frontier (though not general war, of course) and for the manufactured ‘threat’ from Russia to continue (we have covered this in previous articles). They are highly nervous of any settlement that has been dictated to Europe by external interests because it will pull the rug out from under militarisation as driver for federal unification and/or military-industrial-led growth as well as from a key plank (the old liberal rules-based order) that maintains a particular legitimising mythology for European centrism.

The US strategy here seems to be to let the attritional war run on until it becomes clear that Russia is simply taking more land by increments and that the costs of war have become too difficult for a fiscally strapped and deindustrialising Europe. We would guess a true crisis point, if things carry on as they are doing now, will appear in or around the late Spring when any popular support for militarisation appears to be too obviously limited, fiscal problems have become even more intractable and we are moving towards some key elections whose outcome could threaten centrist hegemony either by pushing European member states to a fiscally unsustainable Left or into the hands of populists - either way, spinning the EU into further fragmentation under tenuous centrist control. At the moment, it really is ‘one more heave’ for the European Project in relation to Ukraine where the ‘heave’ is centred on some rather dubious attempt to divert either frozen Russian assets or deliver a major pan-European loan into the pockets of Kiev which is otherwise widely expected to collapse fiscally around the early Spring.

On the other side, the US is certainly placing economic pressure on Russia but this seems to be more at the level of irritant and inconvenience than decisive - a cost to Moscow to give ‘the West’ an edge in encouraging negotiation but not a serious attempt to force it to the table since it is already at that table. For example, the Americans did not exactly confront Japan over its extremely apologetic and respectful decision not to cease purchasing Russian LNG, confirming to some degree Washington’s lack of interest in screwing down Russia beyond a certain level of inconvenience and irritation. The pressure increasingly looks as if it was simply to get the Europeans to ‘put up or shut up’ and start to accept the costs of their own intransigence and moral high ground - a buying of time to allow the Europeans to understand their situation and come up with something more than rhetorical posturing in support of Zelensky.

The Nuclear Factor

The Xi-Trump meeting is likely to become a factor here with China perhaps getting ready to act as co-guarantor of a settlement to be imposed on Ukraine and Europe but one that actually guarantees a sovereign Ukraine (without the Donbass), perhaps enters China into the reconstruction process (to the relief of European politicians) and forces the EU to recognise the cultural rights of remaining Russians as a condition of entry into the European bloc. We shall see but peace does look as if it is quite possible now but delayed until everyone sees what winter brings. Certainly the Euro-Ukrainian 12-point peace plan appears at first sight to be a much more moderate plan than the ‘war hawks’ could possibly have envisaged even a few weeks ago and to be compatible with any Russo-US discussion of wider European security arrangements.

Meanwhile, Russia is not letting up on its energy strikes. We have seen (so far) no US condemnation. Even the Europeans seem to have become tired of shouting into the wind from the moral high ground. On the actual ground, the Ukrainians have mounted an aggressive counter-offensive against a key salient with some success but this does not change the picture of constant incremental Russian expansion westwards including increased Russian control over the Ukrainian side of the Kharkov-Belgorad border, again acquired incrementally. As we write, there is uncertainty over whether Pokrovsk - a key defence asset of Ukraine - will fall but, with Russia in at least 55% control of the City, this looks likely and most commentators think the city is crucial to the whole Ukrainian defence line.

Another development that appears to be passing most of our media by is the surge in posturing over nuclear capacity coming out of both Washington and Moscow. Whether the Russian Burevestnik is as real in its capacity as is claimed is unclear but it adds to the atmosphere of hyping up global nuclear reach in advance of eventual talks on arms limitation. Trump responds in kind - the details need not concern us. What is important is that existing nuclear treaties come to an end in February 2026 so that we are now into a phase of positioning for advantage and often terrifying posturing on all sides in order to start a dialogue on reinstituting arms controls by mutual agreement.

Both Trump and Putin want controls but Putin (understandably) wants them rethought in terms of the total European security arrangements that are envisioned as part of the ending of the Ukraine War while Trump wants to ensure that China is factored in to the discussion because he is dealing with two potential major nuclear enemies and not one. There are thus three key nuclear powers with globally or near-globally destructive capacity and all three are wasting vast sums on weapons that, if ever they are used, would be vastly destructive to the viability of their respective States, let alone the global economy. This is a classic five-dimensional chess game with its own absurd rules, one of which is that a phase of aggressive sabre-rattling and domestic manipulation of dim-witted hawkish opinion (whether neo-conservative or neo-nationalist) is a necessary precursor to the real work.

Europe may become a factor in this insofar as it is not a nuclear power (its central hard power weakness) but that two of its sovereign states are mid-sized nuclear powers with huge national egos at stake (UK and France) offering to share their capacity (with Germany and across Europe respectively) in ways that muddy the waters on comprehensive European security arrangements. We can add to the mix that none of the Big Three can afford to disarm fully not only because of each other but because of other potentially bad actors (India, Pakistan, Israel, North Korea and potentially Iran) who may seek to ‘regionalise’ their weaponry and share knowledge. New emergent potential players (such as Saudi Arabia) also need to be borne in mind. In this area as in so many, liberal centrist Europe may prove to be part of the problem rather than part of the solution.