The Transatlantic Future

A Lost Generation

Washington's chronic economic problems are the cause for the current dislocation in its relations to Berlin. Josef Braml, a scientific advisor to the USA/Transatlantic Relations Program at the German Council on Foreign Relations (DGAP), writes in a recently published analysis that, since 2008, the financial and economic crisis has hit the USA very hard. The unemployment has risen sharply. Because of its insufficient training in "often dilapidated educational institutions," the younger generation, is incapable "of sufficiently contributing to the GNP." Apprehension is spreading "that the youth of today could belong to a 'lost generation'." A "small elite" takes a "disproportionately large slice of the income pie," while "very many must be satisfied with very little." Of all the OECD member countries, only Mexico and Turkey have a wider social gap. Approximately 46 million US-Americans, particularly those in the Afro-American and Hispanic communities are living below the poverty line. "One-third of the Hispanic homes suffer under a lack of food," reports the DGAP expert Braml. This desolate social situation is also worsening the country's economic perspective. "If it is true that two-thirds of the US economy is generated by consumer demand, in other words by private consumption, then this social imbalance is very bad for economic recovery."[1]

Three Reserve Currencies

Braml also writes that Washington is using two means in particular to overcome the current crisis. It is pushing its exports, to replace the insufficient domestic consumption and, by adopting a "loose monetary policy," letting inflation ease the amount of national debt. Braml sees the promotion of US exports behind the Obama administration's efforts to induce EU countries, particularly Germany, to expand their domestic consumption and thereby promote the importation of US American products. The loose monetary policy, on the other hand, subverts the dollar's status, as the predominant global reserve currency. The Chinese government, which, over the next ten years, wants to establish Shanghai as the international finance center, seeks in the near future to undermine the dollar's exclusivity, as the world's reserve currency, and establish three equal-status global currencies, the dollar, the Euro, and the Renminbi. China and Japan, with national economies ranking second and third on the world scale, agreed at the end of 2011 to no longer transact their bilateral business in dollars but in their own currencies. This permits them to use their own currency reserves, "which they, to a large extent, had been placing at the disposal of the USA," in the future more "in the interests of their own national economies." Braml points out that Beijing only took these steps after its attempts to establish so-called "Special Drawing Rights of the IMF" were a complete failure. China's initiative had been sabotaged by two powers defending their own hegemony - the USA and Germany.[2]

Coalition of the Willing to Pay

Because the US is forced to adopt stiff austerity measures to confront the crisis, Braml predicts that Washington, to ease the strain on its budget, will pressure Berlin to increase its participation in western global military interventions. This could take the form of sending larger contingents of ground troops, of stronger financial participation or of at least increasing the investment in the "long-term reconstruction in Iraq, Afghanistan and Libya." The future US administration will also be busy trying to forge "a 'Coalition of the Willing to Pay'," predicts Braml. If it decides not to participate, Berlin will run the risk to lose all influence on US war plans. Washington will then "achieve its foreign policy objectives by other means - if necessary, single-handedly."[3]

Southeast Asia Maneuvers

Military budgetary constraints are particularly significant because of the tougher line the USA is taking toward China. The US is taking initiatives - some with, and others in rivalry to Germany [4] - to forge an ever tighter cooperation with China's Asian rivals. Ties to Japan are being strengthened. The USA has granted India a nuclear treaty and is now demanding "a high price" for it. New Delhi "must give up its autonomous, independent foreign policy and fall in line, as the USA's strategic partner, serving as a counterweight to China." Braml reports that the USA is strengthening its ties also to the Southeast Asian countries in ASEAN. ASEAN is favorable to this development because it enhances the "margin of maneuver" of its member states, "not least of all, in relationship to China." This cooperation contains also a military component. The DGAP expert explains that already back in 2007, the USA, India, Japan, Singapore and Australia carried out joint maritime maneuvers in the Straits of Malacca, a key maritime trade route connecting China and the European West. US experts expected Beijing to try to secure "the two other maritime routes to the Indian Ocean" - the Sunda Straits, between Indonesian islands and the Indonesian Lombok Straits. For this, China must establish "a naval presence off the northern coast of Australia."[5] Recently US President Obama announced that the US would station a contingent of its special forces in Northern Australia.[6]

Globalization of NATO

Braml presumes that if Berlin takes part in the arms buildup of the pro-western countries in South and Southeast Asia, already today,[7] it will later have to take a stand concerning the USA's alliance policy initiatives - also in opposition to China. Influential circles in Washington, for example, are proposing that NATO be transformed from a transatlantic pact to become "a global alliance of free nations." "Incorporating democracies such as Japan, Australia and India into NATO would not only enhance the legitimacy of its global missions, it would also augment the necessary personnel and financial resources of the alliance." The result of this process could be an "Alliance of Democracies," an enlarged western war pact, that in end effect "will be in rivalry with the United Nations or prepared to be its alternative." As Braml recalls, US President Obama has named Ivo Daalder, "the most prominent proponent of this idea," to the post of US Ambassador to NATO. New "partnerships" had been the main topic of NATO's summit in November 2010. "Should the Europeans prove unwilling or incapable of shouldering the burden being laid out for them," explained Josef Braml, in regards to Germany and the other EU members' extended military activities, "they would have fewer valid arguments for refusing a globalization of NATO" - either by formal enlargement of the alliance or by creating a new "Alliance of Democracies."[8] But should Germany and the other EU countries vote in favor of this NATO enlargement, the German-European position within this war alliance would have diminished influence - a development Berlin would hardly want to promote.

[1], [2], [3] Josef Braml: Amerika wählt, in: Hanns Seidel Stiftung: Politische Studien 441, Januar/Februar 2012
[4] see also Auf nach Asien! (II) and Anti-China Coalition
[5] Josef Braml: Die "Rückkehr der USA": Obamas Asienpolitik; ASIEN 122, Januar 2012
[6] see also Das pazifische Jahrhundert
[7] see also War Strategies (II), Offensiven gegen China (III) and Verbündete gegen Beijing
[8] Josef Braml: Die "Rückkehr der USA": Obamas Asienpolitik; ASIEN 122, Januar 2012