Political Dwarf?

hat used to be said of Germany can be said of the European Union, with the same degree of accuracy and exaggeration: that it is an economic giant and a political dwarf. Europe, while no midget, does not carry a political weight corresponding to its economic stature. The recent Iraq crisis is a good illustration. Washington, spoiling for a fight yet not determined to have it at all costs, was forced to alter its scenario. It was not the European Union that was responsible for this shift but France, which, with its clever matchmaking, was helped by Russia and China. This episode actually revealed the divisions within the European Union. Whether old Tory or New Labor, Britain acts as America's poodle, and Germany, when driven to choose between Paris and Washington, still picks the latter, even after the fall of the US.S.R. Nor was the Iraqi affair the only recent example of European weakness. In the Middle Eastern predicament and in Asia's financial crisis, Europe, despite the depth of its interests, has played second fiddle, at best.

True, when its economic interests are attacked directly by a United States proclaiming its whims as international law-imposing sanctions on foreign companies dealing with Cuba or investing in Iran and the Caspian region-the European Union does resist. Even then it prefers compromise to confrontation. In other cases, it's not clear where the lines of conflict lie. Originally, during the cold war, Washington was very much in favor of European integration. It is still paying the idea lip service, though it would obviously prefer a loose free-trade area to a tightly knit confederation. And the United States has many companions on the European side. Sir Leon Brittan, the British trade commissioner in Brussels, is defying French wrath and a threatened veto in pushing for a "new transatlantic marketplace"-a free-trade area between the United States and Europe. And he is far from isolated.

There is no systematic effort to set up E.U. corporations in the current process of economic concentration either. With the coming of the euro, mergers have multiplied both within and across national frontiers, in finance even more than in industry. The takeover of A.G.F., France's second-largest insurance group, by Germany's Allianz is a striking example. The concentration, however, is not all confined to the European Union. True, to face the American giants, E.U. governments have managed to induce the civilian side of the aerospace industry to pool its resources (producing Airbus), and they now are trying awkwardly to streamline the military branch. But they have given up the idea of doing something similar in computers, electronics, airlines or telecommunications. The future of the euro is uncertain, because if it is to consolidate, it needs not just a central bank but some form of state power in Brussels. The monetary union has no unifier andas management in Europe becomes increasingly "Anglo-Saxon" under the influence of U.S. mutual funds-no alternative project to defend. There is no will and no reason why. Political entities are not built, any more than empires are acquired, in a fit of absent-mindedness.

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