Mearsheimer on the future of Palestine

Last week I raised the question of what the United States will do if the two-state solution in the Middle East becomes an impossibility. My compatriot John Mearsheimer has gone one step further, in a hard-hitting speech that you ought to read or watch. He believes the two-state solution is no longer possible, and that the next phase will be struggle for Palestinian rights within a "greater Israel." A key element of that struggle will be inside the Jewish Diaspora, between those he terms "Righteous Jews" (i.e., those who favor universal human rights), and "the New Afrikaners" (i.e., those who will defend "greater Israel" no matter how it treats its Palestinian subjects).

I'm not as pessimistic as John is on this front (i.e., I think there is still a slim window open for a viable two-state solution, though the door is closing). In fact, I hope his speech turns out to be a "self-denying prophecy." In other words, if enough people are convinced by it, maybe they will act to head off the gloomy future that he foresees.  


Stephen M. Walt

It's Greek to me

I'm in Athens at the moment, attending an Economist conference on "What is Shaping the Global Agenda?" My task, in case you're curious, was to offer an American perspective on the global foreign policy agenda, in fifteen minutes or less. I focused on four issues: climate change, the changing balance of power, Israel-Palestine, and global nuclear security. I may not have offered many bold new insights, but at least I didn't exceed the time limit. And if you want to know the basic line I took, read this.

Not surprisingly, the big topic in most of the conversations (and many of the sessions) is the Greek financial crisis and its broader implications. There's been a pretty clear consensus from the people here that I've talked with (most of them from the business community): 1) yes, there will be a bailout, 2) it will probably work; 3) Greece's situation is mostly of its own doing (poor investment choices, ineffective tax system, padded public budgets, fatal combination of persistent deficits and falling competitiveness, etc.) and 4) the whole mess raises big questions about the EU.

I am hardly an expert on financial markets (though like a lot of other Americans, I've gotten more interested in them since 2008!) so I have no great wisdom to impart on the origins of Greece's troubles or the specific nature of the rescue package that is now being assembled.  But it seems to me that this crisis is a serious body blow to the European Union itself. The EU can point to plenty of successes over the years, but the combination of continued expansion and the creation of a common currency back in 1995 now looks like an exercise in hubris. 

The central problem, as plenty of people pointed out, is that EU didn't create the right institutional machinery when it created a unified currency. Once states give up their own currencies, they can't deal with financial or fiscal crises by devaluation. With that flexibility lost, the EU needed far more centralized economic authority (e.g., a true European central bank and a centralized European tax system) to make things work properly. As one banker told me here, it would be no problem if Europe were really one country and Greece was just a poorer province. But Europe's member states refuse to give up those powers, and so the stability of the euro rested on the naive assumption that all the member states would follow the rules and stay within certain fiscal targets.  This was like assuming that it would never rain, or that at least everyone would always be carrying their own umbrella. Or as one European academic recently put it: European monetary union was "not ready for bad weather."

Indeed, as Steven Erlanger points out here, it's been a pretty tough couple of years for the EU. It didn't cover itself with glory in response to the 2008 recession, and the EU had no mechanism for dealing the volcanic eruption in Iceland that snarled air traffic all over Europe. Instead, what we got was a confused array of poorly-coordinated national policies.  And then Greece had to turn to the IMF rather than its European partners to arrange a proper restructuring program.

Among other things, these events cast further doubt on the possibility that Europe will ever speak with one voice on foreign policy. By creating a president of the European Council and a High Representative for the Union of Foreign Affairs and Security Policy, the Lisbon Treaty of 2007 was supposed to be a step in that direction. In reality, however, foreign policy (including economic policy) remains primarily the prerogative of national leaders, with all the potential for division and delay that this implies.

There are in theory two ways that the EU could go in response to these events. One possibility is that these recent failures will eventually prompt a further expansion of all-European institutions.  This view is the modern version of old-style functionalism: if Europe needs certain institutions to work properly, it will eventually create them. 

The second possibility-which I'd deem more likely -- is that we have in fact seen the high-water mark of the EU project.  Nationalism is still alive and well in Europe, the Cold War is over and there is thus less need for unity against an external threat, Germany is gradually shedding its post-World War II reticence, and the consequences of over-expansion and excessive ambition have been fully exposed. I'm not saying the Union is headed for the dust-heap of history or anything like that (no bureaucracy goes out of business that quickly, especially when there are thousands of pages of laws involved), but a significant consolidation of power in the near future seems most unlikely.

Given that the EU Union has been one of the more interesting political experiments in recent decades, this is going to be fascinating to watch. Time for IR theorists to place their bets?