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The US and Europe: during and after the election

24 October 2012

Ronald H. Linden

In typical election campaigns in the United States, foreign policy usually plays a minor role. As they have for years, even during the Iraq war, public opinion polls in the United States show that voters consider the state of the economy to be the most important issue by far.

Despite the fact that there has been, in recent years, at least one presidential debate devoted to foreign policy, the topic remains a low-salience issue in the campaign. Even with the United States still deeply involved in Afghanistan and struggling to find an effective response to upheavals in the Middle East, issues abroad still lack prominence in the current contest. This tendency is reinforced in the current election because the Republican Party clearly does not perceive foreign policy to be an area likely to win their candidate votes against President Barack Obama.

It is not just Governor Mitt Romney’s lack of experience when cast against the incumbent president nor is it his tendency to fumble high-visibility appearances abroad. Rather, for the first time in a long time, a Democratic president is not vulnerable on the ‘security’ issue. Barack Obama’s willingness to ‘surge’ troops in Afghanistan, to use American force in Pakistan and elsewhere — including drone attacks at a rate twice that of the Bush administration - the successful and relatively cost-free intervention to help overthrow Muammar Gaddafi in Libya and, of course, the killing of Osama bin Laden have given the president a security record that is hard to challenge, even in a campaign notable for its negative tone. The challenger has tried to win some points with voters by dusting off the usually reliable charges of being ‘soft’ on Russia or not strong enough in supporting Israel. He was even given what one might call an ‘opportunity’ to portray the president as insufficiently firm in the face the widespread anti-American rioting in the Middle East and the attack on the US consulate in Benghazi, Libya. But Romney himself mishandled the response to those events and the number of voters whose main concern is a resurgent Russia is almost non-existent.

What about Europe? The EU region is by far the most important economic partner for the United States and vice versa. The two parts of the transatlantic economy are linked by trade in goods and services and by sales of each other’s affiliates. EU investment in the United States accounts for nearly three-quarters of all foreign direct investment (FDI) in the country. Correspondingly, American FDI in Europe dwarfs that of all other destinations combined, including China. These investments account for the largest share of foreign-based jobs in the two economies. Add to that the role that European nations play as key international allies, both bilaterally and through NATO, one conclusion emerges: Europe matters.

After the election, the close-knit nature of the US-European relationship is unlikely to change, regardless of the outcome. Barack Obama remains very popular in Europe and a Romney presidency would be unlikely to dramatically weaken either the economic or political ties that bind the two regions. The overall direction and health of this relationship — as well as of each partner — depends very strongly on the health of their respective economies. Sluggish performance, high unemployment and borrowing costs, and weak public spending affect not only the national economies but also those of their partners. For example, while transatlantic investment ties are generally strong, European investment in the US fell by nearly a third in 2011. US exports to Europe were also down and whether the euro zone economies actually contract or only grow slowly, as Europe's main economic partner, the US will feel it. As President Obama said in June: "slower growth in Europe means slower growth in American jobs."

Since job creation and the economy are the major issues for the American public, restoring growth in the European economies plays an important part in the American recovery. Conversely, a robust American economy will buy more from its leading partner, invest more in Europe's healthy economies, and be an attractive site for European companies to make investments. Finding both the economic wherewithal and, probably more important, the political capacity to invigorate such economies is thus the most important task in both the US and Europe.

There is a related, and less quantifiable, issue embedded in the US-European relationship and indeed the American election. Some Americans have an allergy to the ‘European-style welfare state’ as they see it: high taxes, broad social support, and universal health care. With Europe currently struggling to maintain that system and the economic (and physical) health of its citizens, some Americans feel a certain satisfaction at Europe's floundering. This reinforces, in the minds of some, the opinion that the US should not seek adopt aspects of this model, in particular health insurance for all. As Mitt Romney put it while campaigning, "If you follow the president, we're going to be more like Europe, more like a European social welfare state.” Unflattering references to Spain and Greece usually follow. Europe bashing’, as Brendan Greely of Bloomberg correctly noted, ‘is a feature of every modern presidential campaign.’

A Europe with restored economic health and demonstrating the political will and unity it displayed in the recent past - such as during the EU’s 2004 enlargement - would be a welcome antidote to such ‘bashing.’ At the same time, a more vigorous US recovery would make a significant contribution to boosting European economic growth. An improvement on both sides would add a little more muscle to a European economic partner whose strongest and best efforts are needed for the transatlantic partnership to flourish.

Ronald H. Linden is Professor of Political Science and Director of the European Union Center of Excellence at the University of Pittsburgh

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