•On a fundamental level, Europe’s lack of agency in the Russia-Ukraine crisis stems from a growing power imbalance in the Western alliance
By Jeremy Shapiro
Europe, as EU High Representative Josep Borrell has loudly lamented, is not really at the table when it comes to dealing with the Russia-Ukraine crisis. But, given Europe’s need to prevent catastrophe, how is it possible that Europeans have so little say in the matter?
Several explanations spring to mind. There is never a good time for war, but the Russia-Ukraine crisis comes at a particularly inopportune moment for the key governments in Europe. The British prime minister is absorbed by a domestic political scandal that threatens his hold on power. The French government is in full election mode and sees everything through that lens. And the German coalition government is brand new and divided, particularly on the question of Russia. So, they have effectively outsourced diplomacy on Russia and Ukraine to Americans.
All that matters, of course. But it is important to understand that there are more fundamental forces than poor timing at work here. All the focus on the United States’ decline relative to China and the recent upheavals in US domestic politics have obscured a key trend in the transatlantic alliance in the last 15 years. Since the 2008 financial crisis, the US has become ever more powerful relative to its European allies. The transatlantic relationship has not become more balanced, as seemed to be the trend in the early 2000s, but more dominated by the US. On a fundamental level, Europe’s lack of agency in the Russia-Ukraine crisis stems from this growing power imbalance in the Western alliance.
One can see this power shift in virtually every area of national strength. On the crudest GDP measure, the US has dramatically outgrown the European Union and the United Kingdom since 2008. In 2008 the EU’s economy was slightly larger than America’s: $16.2 trillion versus $14.7 trillion. By 2020, the US economy had grown to $20.9 trillion, whereas the EU’s had fallen to $15.7 trillion. From rough parity in 2008, America’s economy is now one-third bigger than that of the EU and the UK combined.
Of course, size isn’t everything when it comes to power. But that growth differential has coincided – again, contrary to predictions – with an increase in the global use of the dollar relative to the euro. According to the most recent Triennial Central Bank Survey from the Bank for International Settlements, the US dollar was bought or sold in around 88 per cent of global foreign exchange transactions in April 2019. This share has remained stable over the past 20 years. In contrast, the euro was bought or sold in 32 per cent of transactions, a decline from its peak of 39 per cent in 2010. The dollar has also sustained its position as the world’s primary reserve currency – accounting for roughly 60 per cent of official foreign exchange reserves, while the euro accounts for 21 per cent. The US has profited from the continuing dominance of its currency to gain an ever-expanding capacity to impose financial sanctions on its enemies and allies alike, without really needing anyone’s cooperation. Russia and China are fighting back against this capacity, with some success, but Europeans have mostly accepted it.
US technological dominance over Europe has also grown. The large US tech companies – the Big Five of Alphabet (Google), Amazon, Apple, Meta (Facebook), and Microsoft – are now close to dominating the tech landscape in Europe as they do that in the US. Europeans are trying to use competition policy to push back against this dominance but, unlike the Chinese, they have been unable to develop local alternatives – so, these efforts seem doomed to failure.
Since 2008, Europeans have also suffered a dramatic loss of military power relative to the US. The uptick in European military spending after the 2014 Russian invasion of Ukraine sometimes obscures this trend. But, of course, all power is relative: as Europe’s military spending has increased substantially less than that of the US, it has fallen further behind. Between 2008 and 2020, US military expenditure increased from $656 billion to $778 billion. In the same period, the military expenditure of the EU27 and the UK declined from $303 billion to $292 billion. Worse, US spending on new defence technologies is more than seven times that of all EU member states combined.
The EU has become ever more divided and less capable of speaking with one voice
Of course, military spending is only a crude measure of military strength. But Europe’s divided approach to such expenditure means that even these figures probably overstate European power. Europeans barely collaborate in spending their relatively small budget – so it remains inefficient. EU member states have fallen short of a 2017 commitment to spend at least 35 per cent of their equipment procurement budgets in cooperation with one another. This figure stood at just 11 per cent in 2020. Therefore, while it is politically important for various Western European NATO members to consider sending forces to bolster defences in eastern Europe, they cannot contribute to the effort on the same level as the US.
Finally, and probably most significantly, Europe’s chronic divisions have weakened the EU and UK even beyond what these crude measures would suggest. When the Lisbon Treaty entered into force in 2009, it seemed to augur a new capacity for Europeans to forge a common foreign policy and harness the latent strength of what was then the world’s largest economy. Instead, the financial crisis divided north and south, the migration and Ukraine crises divided east and west, and Brexit divided the UK and practically everyone else. The institutions of the Lisbon Treaty, particularly the European External Action Service and the office that Borrell holds, have failed to bridge these differences in foreign policy. Overall, the EU has become ever more divided and less capable of speaking with one voice.
The fruits of disunity
Europe’s lack of agency in the Russia-Ukraine crisis is thus the culmination of several long-term trends. As geopolitical competition has increased, Europeans have become more dependent on the US than at any time since the early stages of the cold war.
Of course, Europeans are aware that there is little chance of a return to a cold war-style Western alliance. They have seen that polarised domestic politics creates sudden swings in US foreign policy. They have heard former president Donald Trump’s anti-NATO tirades and his insistence that US foreign policy should put “America First”. They recognise that he, or someone like him, could easily be president in 2025 or 2029. And they understand that the United States’ need to confront the meteoric rise of China means that it is much less willing to either carry the burden of international security – as reflected in its withdrawal from Afghanistan – or focus on Europe as it did during the cold war.
Overall, there is great uneasiness with US leadership throughout Europe. The nascent European sovereignty movement expresses some of that uneasiness. That movement has made some important progress on, for example, creating an anti-coercion instrument to protect against economic warfare. But everyone acknowledges that it has a long way to go.
The European bystander
So, Europe’s worries about the US do not matter very much. Europeans’ loss of power, lack of unity, and inability to reverse the trends described above mean that they are almost bystanders in a crisis that might result in a large-scale Russian invasion of Ukraine or a new divide in Europe. More than that, outside Paris and Brussels, almost everyone in Europe is desperate for US leadership – even if they have differing views of what Washington should do.
In talks on the Russia-Ukraine crisis, Europeans have been reduced to demanding consultations with their American partners. Americans are happy to oblige but, so long Europeans are unable to form a unified front or even present many ideas, those consultations will not have much effect on US plans. Some Europeans, particularly those in the east, are trying to weigh in on these plans through Congress. Here, they might have some effect. But, if so, this will essentially come through special connections to US domestic politics rather than any geopolitical power. The European Commission has proposed a more than €1 billion emergency aid package for Ukraine, but it still needs to be approved by all member states and the European Parliament. It is unclear whether this aid will arrive before Russia launches another offensive, or whether it will make an appreciable difference if it does.
Overall, the situation seems to verify the Russian view that there is no need to engage with Europeans and one should just talk to Americans. From both the Russian and American perspectives, Europe is unlikely to shape the outcome of talks over Ukraine. Any resolution or escalation of the crisis will come through a US-Russia channel.
In the longer term, however, this growing power imbalance in the transatlantic relationship will be a big problem for the US. In a world of increasing geopolitical competition, the US needs partners – not supplicants and free-riders. One of the reasons why Europeans remain dependent on the US is that the American government often encourages this dependence, even decrying some European defence efforts as protectionist or duplicative. For the US to focus – as most American policymakers think it must – on the challenge of China in the Indo-Pacific, it will need European allies that manage European security affairs with less US assistance. In other words, it will need a more sovereign, more powerful Europe.
 Author’s calculation based on the SIPRI Military Expenditure Database.
Jeremy Shapiro is the research director of the European Council on Foreign Relations. His areas of focus include US foreign policy and transatlantic relations.
Credits | ECFR