Could the EU collapse? Unthinkable! Impossible! Yet, that is what was being said just a few months ago about the possibility that Greece would default on its debt. Now, as Europe struggles to put together a second bailout package for that country, the conversation has increasingly focused not on how to save Greece — and with it the Eurozone — but when and how the default will happen. The consensus now is not only will Greece default but it will be messy. The unthinkable has become the base case.
A Greek default, albeit actually good for that country, will trigger a massive economic, political and existential crisis for the European Union (EU). A default will put enormous pressure on other weak European economies, particularly Portugal, Ireland, Spain and Italy. This will cause a crisis among the European banks. But more significantly, Europe will be faced with a choice: save the Euro or save the EU. There won’t be the time to forge a true single fiscal and political union. The only way both to protect the viable economies of Northern and Central Europe and allow the weaker ones in the South a chance to recover is by the former group of countries to allow, even insist that, the latter group exit the Eurozone. This will fundamentally and irrevocably alter the character and purpose of the EU. In fact, should the economic contagion reach France, the EU will certainly collapse.
It is ironic that the Euro’s decline and the EU’s possible demise is likely to be a boon for NATO. Absent a strong and expanding EU, NATO will be the sole gravitational force exerting a cohesive influence across the continent. NATO already includes several countries who are not members of the EU; this number will grow significantly if a Euro crisis occurs.
Most important, NATO will have to stand guard over Europe during a time that may come to resemble economic and even politically the 1930s. NATO can help stabilize weak European governments under tremendous stress. It also can deter outside powers from seeking to take advantage of Europe’s temporary weakness. Finally, NATO provides the best means for leveraging what is likely to be a shrinking stock of trans-Atlantic military capabilities.
Despite its contributions to the conflicts in Afghanistan and Libya, it has become fashionable in recent years in some circles to dismiss NATO as a quaint anachronism. It may well turn out that NATO will prove to be the most important US security relationship of the 21st Century.
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