It’s tragic that 35 years after the Berlin Wall fell, Europe still relies on the US for security: Harold James

Harold James is one of the most acclaimed economic historians specialising in Europe. He is the Claude and Lore Kelly Professor in European Studies at Princeton University. The range of his expertise is so vast that his books and essays are immediately lapped up among scholars as well as Europe watchers.

An alumnus of Cambridge university, he is the official historian of the International Monetary Fund (IMF). A prolific columnist and author, this award-winning academic has penned books on globalisation, Germany, Deutsche Bank and so on. Some of his recent and familiar works are Family Capitalism; The Euro and the Battle of Economic Ideas; and The War of Words: A Glossary of Globalization.

He speaks to Open about Europe’s excessive reliance on the US for security even 35 years after the Berlin Wall fell, and amidst statements from the US that it may reconsider its support for NATO if the European Union pursued regulations against social-media platforms such as Elon Musk’s X. About Europe’s plight, he tells Open, “Since that time (the end of World War II), the relationship with the United States has always been rather double-edged.” Excerpts from the interview:  

When the Berlin Wall fell 35 years ago (November 9, 1989), what were your expectations about Europe as an economic and a military entity? How do you compare the current situation with those hopes back then?

I was fundamentally optimistic in 1989 about what would happen in central Europe after the collapse of communism. And there was indeed – after an inevitably disruptive transition – an amazing economic and also political transformation.

I believe that many of the central European countries still have something important to say to the rest of Europe: as economist Marcin Piatkowski points out in an important book, Europe’s Growth Champion, Poland, the Baltic states, or Bulgaria are examples of economic dynamism that could serve as models for the approach to economic policy in western European countries that have become increasingly sluggish and sclerotic. 

What was missing however in the aftermath of 1989 was a real effort in thinking about Europe in terms of common defence and security. At the same time as the Maastricht Treaty was concluded, the Soviet Union was dissolved at the meeting at Belovezh in Belarus. There was no effective European counterpart, and Europe moved instead in the direction of monetary union as a grand statement of what bound Europe together. As a result, the continent remains heavily dependent on the United States and the NATO alliance for its defence: that now presents a real vulnerability for European states, especially those close to Vladimir Putin’s Russia.

In your recent review in Financial Times of Wolfgang Münchau’s Kaput: End of the German Miracle, you note, “What has gone wrong has an economic root, but is above all the product of a long-term political culture”. Could you please elaborate?

The political culture is simply the result of depending much on the strength of the economy. This habit of thought was formed already in the 19th century when Germany was unified. The influential observer and (19th-century) journalist August Ludwig Rochau said in the 1860s that German unification was not an affair of the heart, but was rather simply a business transaction. And that’s basically still how Germans and also many other Europeans view politics. The country, or Europe, simply provides an opportunity to get rich – or extract benefits. That’s not enough, there needs to be a sense of more engagement: and the cracks show especially at moments of crisis or economic slowdown.

Do you think this political culture has an umbilical link to the US, which has helped rebuild Europe after World War II, and therefore has a sense of indebtedness politically and financially (from Germany to France to England)?

Indeed, it is correct that Europe could not have recovered after the Second World War without the substantial assistance – political, military, and economic – of the United States. Since that time, the relationship with the United States has always been rather double-edged. Europeans would like to emancipate themselves, but they didn’t really know how to do that.

The United States is still a powerful force in European politics. Many European countries think that they have special relationships with the United States, and their politicians will often attempt to play on that special relationship. Britain and Germany have had different versions of this special relationship; so has France which thinks of itself as a sister republic; while Ireland, Italy, Greece and Poland think of a special relationship because of the historic extent of emigration to the United States, and the consequence that many American citizens feel a deep residual loyalty to the country of their ancestors.

It was, for instance, striking how President Joe Biden played on the deep links between Ireland and Poland and the United States. But the United States is not at the moment a very good model for how to run a functioning and representative political system.

How do you assess the performance of the Bretton Woods institutions in the making or unmaking of Europe?

The Bretton Woods institutions played a substantial role in the remaking of European politics until the 1970s. The IMF was crucial in turning around both the Italian and the British economies in the mid-1970s, with very major programmes. After that, until the 2008 global financial crisis, Europeans played a big role in the management of the IMF, but the Fund played little role in European affairs.

The intervention in the European debt crisis after 2010 was a consequence of Europe’s own institutional incapacity. The IMF was brought in to do things – deliver messages – that the European Commission and the European Central Bank simply couldn’t do on their own.

The Fund in consequence took a lot of the blame for fundamentally necessary restructurings and stabilisations that occurred in Greece, Ireland and Portugal. All three of those countries have since recovered, and the big questions now concern countries that did not have IMF programmes: France, Germany and Italy. These countries were at that time, and still are, too big, with problems too complex to really be dealt with in the framework of an IMF program. They need a reform that is driven from within, or – better – within a European framework.

Why is it that you aren’t as pessimistic about Europe (especially Germany) as Münchau? How can you afford to be relatively optimistic considering mounting challenges?

Europe has one big problem: its demographic dilemma that follows as a consequence of the very low birth rate and hence a rapidly ageing population. It still has some central strengths in terms of technical knowledge, and relatively high levels of education, but also traditions of community and civic activism which sadly have been in decline over recent years. If there is to be real hope for Europe, it will require a new Renaissance.

Europe, of course, had precisely such a transformation in the past. Can it use all the possibilities of the rapidly developing new technologies to mount the equivalent of the 15th and 16th century Renaissance, or the 18th-century Enlightenment?

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