Why Europe Matters

As the President travels through Europe, many Americans may doubt the significance of the US-European relationship. Europe is not simply a strategic ally of the US, but an important actor in its own right. Here are 10 reasons why Europe matters to Americans:

  • The European Union (EU) is the fastest growing political system in the world. In the last ten years, the EU has grown from 12 countries to 25, and has brought 450 million people, speaking more than 20 different languages, into a single political system. And it is still growing. Bulgaria, Croatia, and Romania are scheduled to join in 2007, and Turkey has begun the long accession process. Over the next five years, the European Commission will advance efforts to incorporate the Western Balkans (the countries of the former Yugoslavia and Albania). By offering countries the possibility of membership, the EU has succeeded in expanding stability, prosperity and democracy in countries throughout the region.
  • Turkey will join the EU. This past December, the EU accepted Turkey – a traditional ally of the United States – as a candidate for EU membership. Although it may take more than a decade to become an official member, Turkey has already begun to reform its institutions, improve its human rights record, and modernize its economy to meet EU guidelines. As a member, Turkey will bring the EU into the Middle East, as it borders Lebanon, Syria, Iraq and Iran. Turkey will also add an additional 70 million Muslims to the 13 million already living in Europe and augment the EU's defense capabilities.
  • The EU is a global player. The EU is a global actor willing to assert its agenda regardless of the United States. Despite U.S. opposition, the EU has pushed forward on the International Criminal Court and the Kyoto Protocol; intends to lift its arms embargo against China; and has pursued negotiations with Iran. To 1.5 billion people in 84 countries, Europe is their largest trading partner and biggest source of aid, foreign investment, and credit. The EU has also sought to expand its trade relationships with China and Latin America. In 2004, Europe's trade with China increased by more than a third over the previous year.
  • Countries are increasingly orientating themselves toward the EU. As the EU has expanded physically and grown economically, countries outside of its boundaries have shifted their strategic focus toward Europe. Following the "orange revolution" in the Ukraine and the "rose revolution" in Georgia, both Presidents Yuschenko and Shevardnadze declared their desire to join the EU; Yuschenko's first trip as president was to Moscow then Brussels, not Washington. The EU is also seeking to expand its sphere of influence with the launching of its new European Neighborhood Policy, which seeks to promote democracy and development among its poorer neighbors in North Africa, the Middle East, and Eastern Europe. Although the policy stops short of offering the incentive of membership, countries that engage in reform can gain greater market access and closer political ties to the EU.
  • The EU is expanding its defense capabilities. The EU has taken over peacekeeping operations for NATO in Bosnia and Macedonia. The EU is also moving forward in developing a European rapid reaction force that could be used to intervene and stabilize conflict areas, particularly in Africa. European defense ministers recently agreed that by 2007, the EU will have nine battle groups of 1,500 soldiers each capable of deploying within two weeks. European countries have also pledged to acquire more equipment in the form of transport planes, unmanned aerial vehicles, and precision-guided weapons. The EU has pledged not to duplicate NATO's capabilities, explaining to a skeptical US that expanding their own military capacity will allow Europe to contribute more to NATO.
  • Europe is America's largest trading partner. Europe and America have the two largest economies in the world and remain each other's largest trading partners, exchanging about $1 billion in goods a day. The trade relationship has been rocky at times, as the EU and United States have frequently taken legal action against each other at the WTO on issues ranging from steel to bananas. However, resolving disputes through legal action, as opposed to engaging in drawn out trade wars, has been critical for the prosperity of both Europe and America, as well as the world economy.
  • The euro may challenge the dollar. Introduced on January 1, 2002, the euro is used by 300 million Europeans. Since the euro was introduced, its value against the dollar has risen by more than a third. The strength of the euro and weakness of the dollar has led many to see the euro as a possible alternative to the dollar. As the dollar drops, more countries and industries may opt to hold and conduct business in euros instead – potentially undermining the dollar's status as the world's reserve currency. Controlling the world's reserve currency allows the US to borrow cheaply to finance its large deficit. Additionally, the weakness of the dollar relative to the euro has put pressure on Europe's economy by raising the price of its products abroad. This has prompted European finance ministers to insist that the US lower its trade deficit and get its fiscal house in order.
  • EU corporate regulations affect American companies. European regulators have succeeded in blocking mergers between Honeywell and General Electric= They have also successfully prosecuted Microsoft for violations of European anti-trust laws, forcing the company to change the way it does business in Europe. Additionally, American companies often have to adapt their products to meet European regulatory standards. For instance, the quintessential American alcohol, Kentucky Bourbon is sold today in 75cl bottles in accordance with European requirements.
  • European Cohesion Policy is a model of success. The European Union has made a concerted effort to reduce inequality within the EU and promote development across the region. The EU has distributed highly targeted and conditional funding to its poorest regions since 1989 with significant results. Ireland, Portugal, Spain and Greece have experienced significant economic growth. Regions that received EU development funding grew at a rate of 1 percent higher than the EU average. The funding helped transform Ireland into one of Europe's richest countries and also helped ensure democracy and stability in the eight former communist countries that recently joined the EU.
  • The EU is a model to other regions. Many regions of the world have sought to emulate the EU's success. From Mercosur in South America, to the Caribbean Community, the Association of South East Asian Nations, and the African Union, regional organizations have attempted to achieve the political and economic integration that the EU has accomplished.

Max Bergmann is a researcher at the Center for American Progress.

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Max Bergmann

Former Senior Fellow