The Transatlantic "War of Fines"

 September 23, 2016

I’m not going to write about Bratislava’s informal September summit, for nothing of substance regarding the future of the Union has been decided there. Fact is, EU political leaders have delayed important decisions for the spring of 2017, after the results of the American elections are in.

Why does the next American president matter ? For a start, if Trump wins in November he will try to make good of the promise to squeeze more money for NATO from rich EU member states. If H. Clinton gets into the White House, pressure to do more for the common defence of the continent will somewhat be diminished and global elites from both sides of the Atlantic will get a powerful ally in Washington.

As matters now stand, transatlantic relations are deteriorating at a rapid pace. Indeed, for a few months now the “war of fines” has been well and truly underway. The EU has slapped a 13 billion-euro fine on Apple, the US’ best-performing corporation. The US retaliated with a 14 billion-dollar fine on Deutsche Bank, which – if enforced – could trigger a collapse of the entire German banking system and a full-fledged banking crisis within the EU. A few months prior to this the US had fined Volkswagen, the EU’s largest car manufacturer, 15 billion dollars. All these come on top of BNP Paribas’ 9 billion-euro fine from 2014, one of the largest ever applied to a bank outside the US.

The amount of money collected in fines by the US government is a clear indication that Uncle Sam has his coffers empty and finds it very hard to continue to provide adequate funding for Europe’s defence via NATO. The realisation of this fact might have prompted Jean-Claude Juncker to ask for the creation of an European army, albeit at the wrong time in the EU’s history.

In truth, the EU is able to provide for its own defence. The size of its member states’ armies combined, their air forces and navies could successfully deter would-be aggressors. Juncker, however, is the wrong person to undertake such a project, simply because he is a federalist. The EU does not need an “European army” as such, but rather a common NATO-like command structure in Brussels (or elsewhere) that could coordinate the militaries of member states in the event of a major conflict. That’s all.

Naturally, the new structure will in time replace NATO as a collective defence organisation and all member states will need to agree to higher levels of defence spending than it has been the case for the past sixty years. A common defence policy and collective security structures will not, however, alleviate the EU’s major crises, such as economic stagnation and migration. For those problems to be solved, the EU has to rid itself first of austeritarians and federalist-minded political leaders, who are chiefly responsible for the predicament the Union is currently in.