Whither Europe (and NATO)?

I’m beginning to think that what’s happening in Europe these days is really critical, in the sense that it will have large and lasting ramifications no matter how it turns out. Europeans were feeling their oats a few years back, and starting to talk in lofty terms about the strength of their common currency, their unique ideas about "civilian power," and their plans for defense integration and a common foreign and security policy. The EU was expanding, major neighbors like Turkey were knocking on the door, and the United States was shooting itself in the foot in Iraq and elsewhere.

Today, however, Europe’s prospects don’t look quite so bright. European officials have finally gotten around to assembling a rescue package for Greece (remember when a trillion dollars was a lot of money?) and this belated action seems to have quieted markets for awhile. But it remains to be seen if Europe’s problem children (Greece, Portugal, Spain, Ireland) will be able to raise taxes and cut budgets enough to make themselves solvent again. If not, then the rescue package will just have kicked the problem down the road, and we will face a renewed crisis a year or two from now. And if that happens, don’t expect another bailout.

In the past, Euro-optimists like Princeton’s Andrew Moravcsik have argued that crises like this just make Europe stronger, by forcing it to get its house in order and strengthen the relevant supra-national institutions. Maybe, but I’d be more convinced if my friend Andy hadn’t described Europe as being "stronger than ever" last August (i.e., well before this latest crisis hit). Meanwhile, voters in Germany just delivered a sharp rebuke to Chancellor Angela Merkel and the Christian Democrats, sending a clear message that their support for costly bailout packages is not infinite.

The larger problem is longer-term. Europe’s population is declining and aging, which means that a smaller number of workers will have to pay for welfare benefits for an ever-growing number of retirees. Cutting benefits will be politically difficult, raising taxes is always hard, and immigration won’t bring in many of the skilled and highly productive workers that Europe needs. The latter step also creates cultural frictions. Maybe the well-off countries can jettison Greece et al from the Eurozone (thoug not the EU), but to do this would be to enshrine inequality within the EU itself and would be a major step backward. No doubt Europe will find a way to muddle through, but austerity will be the watchword for some time to come.

In any case, whether Europe grows closer together or begins to spin apart, it’s going to carry a lot less weight in world affairs in the next few decades. Its population is shrinking and aging, its military power is increasingly hollow, and it’s going to be short on money for years to come. If U.S. officials think they are going to get a lot more help from NATO in the decades ahead, they are living in a dream world.  

So here’s my question: will NATO’s new “Strategic Concept,” currently being formulated for presentation at the NATO summit next fall, reflect this emerging reality? Will it openly acknowledge that Europe is not going to commit more resources, and identify a set of (fairly modest) common goals that the alliance actually has some chance of achieving? Or will it contain the usual pious declarations of transatlantic solidarity, along with various empty pledges that everyone knows are no more than polite fictions?