This year, the 27-nation European Union was supposed to come of age as an actor on the world stage, bolstered by the Lisbon Treaty, which streamlines the EU's cumbersome institutions. Instead, Europe is starting to look like the loser in a new geopolitical order dominated by the U.S. and emerging powers led by China.
When the world's policy and economic elite gather Wednesday in Davos, Switzerland, for the annual World Economic Forum, much of the talk will be about the rise of a "G-2" world where the U.S. and China are the most important players.
A growing number of European policymakers and analysts say the EU's international influence may have peaked thanks to a combination of political divisions and poor long-term prospects for its economy.
"The EU's attempts to be a coherent international actor seem to be decreasingly effective," says Charles Grant, director of the Center for European Reform, a pro-EU London think tank.
Europe's hope of playing a leading role in a multipolar world got a cold shower in Copenhagen last month, at the United Nations-sponsored talks on climate change. EU countries view themselves as leaders on the issue.
But no Europeans were invited when U.S. President Barack Obama and Chinese Premier Wen Jiabao held the make-or-break meeting on Dec. 18 that brokered the modest Copenhagen accord. The Chinese invited the leaders of India, Brazil and South Africa.
That meeting and Europe's absence was "the seminal image of 2009," says a senior European diplomat. "It was a signal that we are becoming more and more marginalized and peripheral" in the new balance of global power, he says.
EU countries haven't helped their own cause lately. The Lisbon Treaty, which entered into force in December after eight years of struggle, was meant to make the EU a more coherent actor, in part by creating two new jobs—a president to lead EU summits and a high representative to present a united foreign policy.
Last fall, however, national leaders decided they didn't want powerful figures overshadowing them. They appointed Belgium's low-key premier, Herman Van Rompuy, to chair summits, and a previously obscure U.K. official, Catherine Ashton, to lead a common foreign policy.
Europe, of course, remains a major global player. Its $16 trillion economy accounts for 28% of global output, more than the U.S. The EU's integrated consumer market is the top destination for Chinese goods. Its industrial engine, Germany, remains the world's fourth-largest national economy and exports nearly as much merchandise as China.
Britain and France can still deploy significant military power abroad, and have permanent U.N. Security Council seats. Europeans are well represented in global institutions and committees, including the International Monetary Fund and the Financial Stability Forum, where EU officials are influential in negotiating new banking rules.
Europe also has "soft power," in its ability to attract and co-opt others by offering EU membership to neighbors, and in representing a model of welfare capitalism to people around the world who dislike the more-individualistic American version.
Yet many of those measures of influence may have peaked, say foreign-affairs scholars.
"Europe has undersold its soft power because of its own confusion: Should it project its economic model, or should it adopt the one from across the Atlantic," says Rajeev Kumar, director of the Indian Council for Research on International Economic Relations.
The EU suffered a deeper economic contraction than the U.S. in 2009, even though the U.S. was the epicenter of the economic crisis. It faces a slower recovery thanks partly to onerous public debt in many countries.
Europe's longer-term economic prospects are dimming: Ageing and, in some countries, shrinking populations will compound budget strains, while a growing retiree vote could entrench resistance to economic overhauls.
Economists at Goldman Sachs—who coined the term "BRIC" for Brazil, Russia, India and China—project the leading emerging economies will steadily overtake Western Europe's leading nations in coming decades, and that the U.S., Chinese and Indian economies will dwarf all others by mid-century.
Europe's strong representation in international forums is under fire. Critics from developing countries say Europeans still have too many votes at the IMF and U.N. Security Council, reflecting post-World War II reality rather than today's.
G-8 summits, where Europeans were in the majority, have already given way to the G-20 as the leading forum for discussing the world economy.
Many Europeans have long dreamt of a multipolar world, in which diplomacy and international law replace American dominance and military muscle-flexing. But EU-style soft power is turning out to be less useful than expected in dealing with China and other rising powers.
"China and Russia see the world in totally realist, zero-sum terms," says Mr. Grant, adding: "If we want China to take us seriously we have to have hard power," or the ability to twist arms through economic, military or other means.
The EU is inherently unsuited to wielding hard power "because it is not a state," says Francois Heisbourg, special adviser at the Foundation for Strategic Research, a Paris think tank.
EU members such as Germany, Britain and France retain their own foreign and security policies, which are often at cross purposes, analysts say. China and Russia have each exploited such divisions to play off EU members against each other on issues such as human rights and energy supplies.
Last fall, U.K. Foreign Minister David Miliband called on EU countries to drop their foreign-policy differences in a widely noted speech, saying that "the choice for Europe is simple: Get our act together and make the EU a leader on the world stage, or become spectators in a G-2 world shaped by the U.S. and China."
Greater unity would help the EU to deal more effectively with China, Russia and others, but the EU's rapid expansion in recent years has also made unity harder to achieve. That hasn't gone unnoticed in other regions.
When India's foreign ministry commissioned Mr. Kumar and other scholars to identify India's strategic interests for coming decades, the experts concluded India could ignore the EU's pretensions to be a world player.
"A more diverse and divergent Europe will remain quite involved with itself, rather than being able to project power," says Mr. Kumar.
The EU has one "silver bullet" that could boost its external influence, Mr. Kumar says: Admitting Turkey. "That would change the EU's demography, make it seem like less of a Christian bloc, and raise its acceptance" in Asia and the Middle East, he says.
However, Turkey's EU membership talks have stalled amid growing mistrust on both sides.
http://online.wsj.com/article/SB10001424052748704905604575027094159815012.html?mod=WSJEUROPE_hpp_MIDDLETopStories
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