It is still unclear whether the sensational story of Dominique Strauss-Kahn’s alleged sexual assault of a maid at New York’s Sofitel hotel is more of a tragedy or a farce, but it is bound to have repercussions. What matters most now is how the incident will affect Europe.
When Paris pushed the appointment of Strauss-Kahn to the position of IMF managing director in 2007 amid almost universal skepticism, public promises were made that this French socialist would be the last European to head the fund. The rule that has been followed since the formation of the Bretton Woods system is that posts are to be divided between the two hemispheres of the Western world: the United States keeps its foothold in the World Bank and Europe in the IMF. However, the redistribution of global economic influence in the early 21st century has made this arrangement increasingly obsolete, and the growing role now played by China and other emerging economies was only accelerated by the recent financial downturn.
Privileges are rarely, if ever, freely relinquished. Talk about IMF reform in favor of developing markets has typically degenerated into a few cosmetic changes and an exercise in bureaucracy. Even if Strauss-Kahn had stepped down – for instance, if he had decided to take part in the 2012 presidential elections at home – the European Union would have gone to any lengths necessary to retain its right to choose the fund’s managing director. The position is one of the primary symbols of its leading role in global finance. Moreover, the IMF’s recent efforts to save problem-ridden EU members from financial ruin have – and not without some irony – become all but its primary mission.
Europe now has little hope of retaining the post. The scandal occurred in America, so any decision-making in the immediate future will take place against a very unfortunate backdrop, and fast-developing Asian countries are confident that their time has come. Meanwhile, the United States is trying to sign big deals with the most influential among them, albeit with dubious success. A few examples include the blatant ouster of Europe from the Kyoto process and recent WTO talks in Doha. As a result, the bargaining chip of the IMF directorship opens up new opportunities for Washington in other important directions.
Europe’s global political influence in the second half of the 20th century – that is, after the loss of independent global clout by major European countries – was based on two grounds: first, its privileged position in international institutions; and second, the attractiveness of European integration as an example of successful, well-balanced development. However, neither of these claims to influence now seem as secure as they have been in the past.
Europe’s privileges are diminishing as the world’s political and economic reality shifts away from the institutional design of the past century, in which it held a completely different role. It is not that easy, however, to simply rescind or abolish them. Thus, a change to the UN Security Council remains unthinkable. Current veto holders would never allow this privilege to be shared or compromised; and no matter how much the presence of the two European chairs is criticized, Britain and France can feel confident of their positions behind the backs of China, Russia, and the U.S. – although the real question seems to be the limited influence of the Security Council itself. The guarantees on the Bretton Woods system are not as strong, but the Old World is not going to give up without a fight.
Europe also has other, more informal privileges. As NATO’s second line of support, it can not only breathe easy behind the American “security umbrella” but also bask in the glory of the United States’ post-Cold War reputation as the unquestionable leader of the West and, subsequently, the rest of the world. There are, however, changes here as well. First of all, NATO is losing its aura of relevance and prestige. Having failed to achieve a global mandate, the block will most likely return to more modest regional affairs as the North Atlantic fades from the center of global policy-making. Second, the Libyan conflict has shown that the United States is in fact willing to leave France and its allies to fight in North Africa on their own. America no longer wants to get involved in resolving European issues at its own expense. Libya has also revealed the disappointing inability of major EU countries to take effective joint action. Indeed, they are making their own decisions on whether to fight, like France and Britain, or, like Germany, to abstain.
At the same time, Europe’s image as a care-free oasis of prosperity and a moral beacon of contemporary policy is gradually fading away. Integration is being obstructed by deep contradictions between economic interdependence and political differences. But the main issue is a change in the public atmosphere itself.
People are increasingly concerned over future uncertainty and prone to protective attitudes. The idea of preserving the status quo at all costs is being fueled by external factors – from economic rivalry and migration pressure to the erosion of cultural identity. Politically, this has been reflected not only in an upsurge of right-wing populists but rather in a subtle paradigm shift wherein the entire mainstream has moved to the right.
In a few years, the world is likely to see a different EU – one that is increasingly apprehensive, irritated, and isolated. For Russia, Europe is not only a major partner by tradition but also a source of inspiration for its modernization programs. It should, therefore, understand the changes underway in contemporary Europe in order to assess the opportunities and risks occasioned by this new reality.