The American era appears to be alive and well. The U.S. economy is more than twice the size of the next biggest—Japan's—and the United States spends more on defense than the world's other major powers combined. China is regularly identified as America's next challenger, but it is decades away from entering the top ranks. The terrorist attacks in New York and Washington certainly punctured the sense of security that arose from the end of the Cold War and the triumph of the West, but they have done little to compromise U.S. hegemony. Indeed, they have reawakened America's appetite for global engagement. At least for the foreseeable future, the United States will continue to enjoy primacy, taking on Islamic terrorism even as it keeps a watchful eye on China.
That encapsulates the conventional wisdom—and it is woefully off the mark. Not only is American primacy far less durable than it appears, but it is already beginning to diminish. And the rising challenger is not China or the Islamic world but the European Union, an emerging polity that is in the process of marshaling the impressive resources and historical ambitions of Europe's separate nation-states.
The EU's annual economic output has reached about $8 trillion, compared with America's $10 trillion, and the euro will soon threaten the dollar's global dominance. Europe is strengthening its collective consciousness and character and forging a clearer sense of interests and values that are quite distinct from those of the United States. The EU's member states are debating the adoption of a Europe-wide constitution (a move favored by two thirds of the union's population), building armed forces capable of operating independently of the U.S. military, and striving to project a single voice in the diplomatic arena. As the EU fortifies its governmental institutions and takes in new members (Poland, Hungary, the Czech Republic, and at least four other countries are expected to join in 2004), it will become a formidable counterweight to the United States on the world stage. The transatlantic rivalry that has already begun will inevitably intensify. Centers of power by their nature compete for position, influence, and prestige.
The coming clash between the United States and the European Union will doubtless bear little resemblance to the all-consuming standoff of the Cold War. Although military confrontation remains a remote prospect, however, U.S.-EU competition will extend far beyond the realm of trade. The U.S. Federal Reserve and the European Central Bank are destined to vie for control of the international monetary system. Washington and Brussels will just as likely lock horns over the Middle East. Europe will resist rather than backstop U.S. leadership, perhaps paralyzing the World Bank, the United Nations, and other institutions that since World War II have relied on transatlantic cooperation to function effectively. An ascendant EU will surely test its muscle against America, especially if the unilateralist bent in U.S. foreign policy continues. A once united West appears well on its way to separating into competing halves.
For the moment America remains largely oblivious to the challenges posed by a rising Europe. Policymakers in Washington tend to view the EU as at best an impressive trade bloc, and at worst a collection of feckless allies that regularly complain about America's heavy hand even as they do little to bear the burdens of common defense. Moreover, most American foreign-policy experts presume that were the EU to realize its full potential as a political and economic power, the geopolitical consequences would be minimal: amity among the Atlantic democracies has been a well-entrenched fact of life, an apparently unalterable product of shared history and values. That the EU and the United States might part ways would seem to border on the unthinkable.
These presumptions are dangerous illusions. To be sure, Europe is not a centralized federation, and its integration is proceeding in fits and starts. But political entities that take shape by stitching together previously separate states always emerge tentatively. The United States began as a loose confederation in 1781. After that formula proved too weak to sustain the Union, America opted for a tighter federation in 1789. It then took roughly a hundred years—not to mention a bloody civil war—for the Union to strengthen its governing bodies, nurture a national identity that transcended state loyalties, and project a geopolitical voice beyond its neighborhood. Europe has been working at political union for about five decades—and faces many hurdles in the years ahead. But the EU is already coming of age as a collective force; it is on, if not well ahead of, schedule.
History also provides ample warning of the trouble likely to accompany a division such as the one that the West is now starting to experience. Consider the fate of the Roman Empire after Diocletian decided, at the end of the third century, to split the realm into eastern and western halves, leading to the establishment of a second capital, in Byzantium—which Constantine elected to rename Constantinople in 324. Despite their shared heritage, Rome and Constantinople became rivals: a common religion fell prey to lasting disputes over authority and doctrine, and imperial unity gave way to bloodshed and the demise of Roman rule.
As Byzantium did with Rome when it separated from its former overseer, the EU is making a run at the United States. And just as the Byzantines and the Romans parted ways over values and interests, so have the Europeans and the Americans. The two sides of the Atlantic follow different social models. Despite recent deregulation across Europe, America's laissez-faire capitalism still contrasts sharply with Europe's more centralized approach. Whereas Americans decry the constraints on growth that stem from the European model, Europeans look askance at America's income inequalities, its consumerism, and its readiness to sacrifice social capital for material gain.