EU-US: Romney or Obama, it’s all the same for Europe
5 November 2012
Il Sole-24 Ore
Whether it’s the incumbent or his Republican challenger who wins tomorrow’s presidential election in America, economic and political relations with the Old Continent are unlikely to be substantially affected, writes Sole 24 Ore’s correspondent in the United States.
Americans head to the polls tomorrow with a last-minute provocation from Republican presidential candidate Mitt Romney on the subject of Europe. “Italy, Spain and Greece”, the symbols of the European welfare budget madness, are the model of Barack Obama. Time for some Euro-bashing, is it? Is Europe to become a major “strategic” theme that, if Romney should win the election, will be talked about in the coming months?
And if Obama wins? Is he for or against Europe? Is he not the one who proclaimed himself the “first president from the Pacific”, marking a turning point in the transatlantic dialogue? What will he do in his second term? Will he once again make his first foreign visit to Asia, relegating Europe to the background?
These are legitimate questions. But when they turn on Europe, which was largely absent from the election debates before being brought in to be ridiculed by Mitt Romney, a distinction must be made between the campaign speeches, the global shifts going on in the background, and the facts. Figures show us that the links between Europe and the United States are so strong and diversified that they make these controversies absurd.
Pragmatism will prevail over rhetoric
Direct investments from the United States into Europe and vice versa are much higher than the figures from China and Japan put together. In 2011 cross-Atlantic trade jumped 14 percent to reach $636 billion, or 500 billion euros, and it employs 15 million people. Research and development in the two trading blocs account for 65 percent of the global total, while the transatlantic economy makes up 54 percent of world production and 40 percent of purchasing power. If we knocked down half of the trade barriers, trade could increase by $200 billion. Not to mention the strength of the North Atlantic Treaty Organisation [NATO], one of the largest alliances in history.
First, let us look at Mitt Romney. His talk is annoying, because it’s relevant. But it is a fleeting kind of talk, ideological, created for the elections. As well, the Republican candidate has invested in Europe – even in Italy – and he has always made judicious investments. If he wins, pragmatism will prevail over rhetoric.
From a policy perspective, America under Romney will differ very little from America under Obama. Especially because the Federal Reserve, the United States’ central bank and the first actor in the bilateral relations when it comes to managing the financial crisis, will continue to be steered by Ben Bernanke, in a sign of continuity and coordination.
The great global shift
And Obama? It is true that he started out by putting the Pacific before Europe. But almost immediately he grasped that the big geopolitical issues around the stability of the Mediterranean, beset by economic difficulties, are playing out on the other side of the Atlantic, that shore where America has its ethnic, ideological and cultural roots. And the president quickly changed his tone.
The great global shift underway is the other big question: it is true that the major economic powers, China and the U.S., are overtaking us. But it will be up to us to keep up with them, to put in place common structures such as those designed at the G20 meeting at Los Cabos, to move ahead with ‘federal’ institutions, to deregulate, and to dismantle rigid structures.
Indeed, we cannot be upset by Europe’s absence from the presidential debates and at the same time be offended at the criticisms we come in for. The polarised messages from Mitt Romney and Barack Obama – when they accuse us of dragging our feet in solving the economic crisis – have a grain of truth in them: the state does play an excessive role in our economies, and our model of competitiveness will find it hard to scale the heights of the global competition. Again, these are facts. And we will have to take them into account, regardless of how they are more or less aggressively and disagreeably exploited by Romney and Obama, before the election and after it.