DOES EUROPE MATTER? Yes & no.

Two developments of the past few months are certain to be crucial to the evolution of international balance in the twenty-first century.

First was the spectacular military performance in Afghanistan of U.S. high-technology air attacks, directed by special forces on the ground, supporting local forces prepared to act as American auxiliaries. The U.S. air and ground components of this combination will always be available. The willing auxiliaries will not, which is the flaw in the combination.

Second was the overwhelming success of the launch of Europe's new currency, the euro. Its introduction evoked enthusiasm even from the Germans, supposed still to begrudge their loss of the deutsche mark. The currency markets immediately raised it against the dollar and the yen. The importance of the euro, however, lies less in the caprices of the markets than in what the currency's initial success implies about the future and the nature of Europe's ongoing unification. Once again, "Europe" has demonstrated that it progresses through economic change, rather than political initiative.

The specific quality of European development has always been that economic decisions and actions have been indispensable to the production of political consequences. They even have substituted for them, which is likely to prove the case with the euro. During the same weeks that led up to the currency changeover, the European Union nations were again demonstrating the EU's inconsequence in world political and military affairs.

The consensus among EU governments and European public opinion today is more hostile than it has ever been to Israeli and U.S. policies toward the Palestinians. Yet the EU is incapable of expressing a serious protest against what has amounted to the termination of a political process that, since Norway's courageous convocation of secret Israeli-PLO talks a decade ago, has promised eventual Palestinian autonomy.

Europe's embarrassing demand for a military role in the U.S. intervention in Afghanistan proved unwanted by Washington, all but useless in the event, and largely ignored. The affair was entirely dominated by Washington's decisions and American military force. British Prime Minister Tony Blair, acting independently, did his best to inject a European influence into Washington's decisions by means of tireless promotion and travel to boost support for President George W. Bush. His efforts were politically welcome, but his hope to influence Washington was wasted effort.

Individual European governments retain significance, but "Europe" does not exist as an actor in international political and military matters. Even the EU project to create a small rapid-reaction force for innocuous peacekeeping missions has stalled because governments have made no serious funding available to it. The two European fighter aircraft that mark an advance on the U.S. aircraft actually in service or production--the Anglo-German Eurofighter and the French Rafale--have been so underfunded, and their development so retarded, as to suggest that Europe is ready to abandon military aerospace.

Yet at the same moment, Boeing, the U.S. champion of commercial aircraft, is in deep trouble because of European Airbus competition, and is trying to remake its stock-market identity as a non-aerospace company. Today's short-perspective Wall Street is incapable of providing the long-term investment funds Boeing would need to develop a competitive new generation of commercial aircraft. The company has gone so far as to move to Chicago, to shake off Seattle's indelible identification with commercial airplane manufacturing.

A precarious new world balance is emerging. The United States is preoccupied with military power, political leadership, and domination of world financial markets. Even before September 11 it had all three, but the political class and the public were divided on whether such assets should be exploited to make the United States into an informal imperial or globally hegemonic political power, with all of the ostensible rewards, but also the griefs, which history provides to those with such ambitions. September 11 made the choice--or so it now seems.

The Europeans have always had political ambitions for their union, mostly expressed in terms of federation, an imprecise term whose actual definition most European officials avoided. A foreign-affairs chief and a high representative were named to conduct a European foreign policy that never emerged, and which will certainly not be possible, on matters other than elementary self-defense, in a Europe expanded beyond fifteen members.

But economic Europe, trading Europe, single-market Europe, single-currency Europe, industrially cooperating Europe, protectionist and subsidizing Europe, cultural-exception Europe, social-protections Europe, health-care Europe, antitrust Europe, "antidumping" Europe--and, to a certain measure, antiglobalization and anti-American Europe--all have emerged and are doing very nicely.

Where will this put us as the century advances? The only rival the United States has is Europe, and Europe is not, and will not become, a political or military power. Pressed, it could form a defensive coalition of sorts, and of course, there is latent military power in Europe's economic strength, in aggregate greater than that of the United States. The question, for which we have no answer, is how much military power will really count in the years to come.

[C] 2002, Los Angeles Times Syndicate International