OPINION – Europe does not need another Cold War

Jorge Costa Oliveira – Partner and CEO of JCO Consultancy

In 1990 the first Cold War ended peacefully and the resulting stability benefited Europe, in particular Eastern European countries that became liberal democracies with flourishing market economies and joined the EU. Barely 30 years later, we seem to be on the brink of a new Cold War, this time between the US and China.

A new Cold War is not in Europe’s interest. Since the end of the first Cold War, the world has changed profoundly. A bipolar world of two hostile ideologies and irreconcilable economic systems – the historical background in the first Cold War – no longer exists. Europe is no longer divided by an iron curtain and the fear of becoming the battleground between NATO and the defunct Warsaw Pact has disappeared. The only remaining threat to the EU – Russia – still is a military power but hardly a serious menace when we look at its economic relevance – a developing-country economy based on the export of raw materials (oil, gas, coal, and ores), with a GDP < USD1,5 billion in 2020 (between Spain’s and Italy’s), a per capita income equivalent to Malaysia and a high income inequality.

Europe is no longer the centre of the world and transatlantic commerce is no longer the most relevant in international trade. The new global economic hub is shifting to the Asia-Pacific region and South Asia. It is also in these geographies that the new Cold War will unfold. The US wants to play an active role in this region, namely in terms of military hard power and is forging new alliances (AUKUS) and strengthening old ones to contain the rise of China (and, in the long run, India). It is not in the EU’s interest to get involved in this new Cold War in Asia-Pacific.

Europe has other more pressing matters to handle. It must continue to “straighten” European issues, starting with consolidating European integration and preparing the EU’s expansion to the Balkan countries and the rest of Eastern Europe with whom there are association agreements. Fiscal and monetary integration should be deepened as well as regional cohesion. Border control mechanisms and relations with buffer states (Turkey and Maghreb) need to be strengthened to ensure that the EU does not continue to experience uncontrollable economic migration flows. A policy of attracting young couples’ migration is needed to help reverse the European aging trend. And it is essential for Europe to assume its strategic autonomy in defence matters, to allow for effective independence from the US, at least as regards the European area.

European leaders should also acknowledge that, despite the EU countries’ combined military expenditure (€198 billion in 2020) being more than triple that of Russia (€55 billion), the EU’s main strength is not nor will it be on the military component. Europe’s might lies essentially on its soft power. The strong European soft power comes from factors such as being the main humanitarian and aid-to-development donor in the world. As well as from its cultural diversity, its tolerant society, its social welfare system, its social mobility, the creativity of its scientists and entrepreneurs, its educated workforce, the disruptive capacity of its SMEs and its export-oriented industries. Europe is attractive for its political stability, functioning governments, reliable legal systems and relatively low rates of corruption – qualities that are rare in today’s world.

Furthermore, recent surveys show that the vast majority of EU citizens does not want Europe or its European country to be involved into a new Cold War.

Lessons can and must be drawn from the recent European stance on several disastrous US-led military interventions and the implosion of nearby states such as Libya and Syria. It is in the EU’s interest to use its military and economic might to impose a Pax Europea in the Mediterranean area. It’s not in Europe’s best interest to get involved in adventures in the Indo-Pacific, let alone as squires of its American allies.