The Foreign Service Journal, February 2012

F E B R U A R Y 2 0 1 2 / F O R E I G N S E R V I C E J O U R N A L 23 F OCUS ON THE E URO Z ONE D EBT C R I S I S W HY THE E URO C RISIS M ATTERS he euro zone crisis is not sim- ply an economic issue. It is a political problem, one that poses a grave challenge to the foreign policy and security interests of the United States. And its fallout could affect U.S. strategic interests for years to come. The trans-Atlantic alliance, long the cornerstone of America’s engagement with the world, was already erod- ing before Europe’s sovereign debt problems came into view, thanks to the alliance’s lack of a clear future mission and the lure of Asia. As the continent’s economic prob- lems accelerate, they accentuate the alliance’s underlying problems, complicating Washington’s ability to deal with its myriad foreign challenges. Sovereign debt defaults by one or more euro zone countries and the subsequent potential breakup of the euro zone could well lead to stagnant economic growth, debilitating introspection and self-preoccupation in Eu- rope. “A Europe that is not united,” warns Simon Serfaty, a scholar at the Center for Strategic and International Stud- ies in Washington, D.C., “is, by definition, less strong. And a Europe that is less strong will become increasingly less vital to the United States in the 2010s, when Ameri- can power will need to rely on allies that are not only will- ing, but capable.” The U.S.-European partnership and U.S. foreign pol- icy have weathered potentially debilitating challenges in the past, to be sure: France’s withdrawal from NATO in 1966, the VietnamWar of the late 1960s and early 1970s, the basing of American intermediate-range nuclear mis- siles in the early 1980s, the wars in the Balkans in the 1990s and, most recently, the Iraq War. Thanks to U.S. strategic leadership, the trans-Atlantic alliance remains solid, suggesting America can weather this storm, too. But past performance is no guarantee of future results. And it would be shortsighted to underes- timate the challenges that lie ahead. The Inconceivable Becomes Possible The possibility that the euro zone could ever break up was once considered inconceivable, for several reasons. First, the economic cost of such an unraveling was just too high. Moreover, the treaty creating the euro made no A S W ASHINGTON SCRAMBLES TO COPE WITH THE ECONOMIC FALLOUT , IT MUST REASSESS E UROPE ’ S RELIABILITY AS A STRATEGIC PARTNER . B Y B RUCE S TOKES Bruce Stokes is a senior trans-Atlantic fellow at the Ger- man Marshall Fund of the United States.