Wake Up Europe!
It was not just white, old, poorly educated men who voted for Donald Trump. There are plenty of them in America, but not enough to put a candidate to the White House. Mr. Trump won voters from almost all the milieus and social groups, which, in spite of their core differences, are united in with two convictions: they feel that they and their country have been treated badly, and they are receptive to news of all kinds, whether true or false, that confirms this impression. Most of the Trump voters do not live on the coasts; they live in the interior of the country, where America has already directed its gaze inwardly and not to the outside. These voters have promised Mr. Trump their support. The judgment of these voters will also determine whether Donald Trump remains more than just an episode of American history.
On this side of the Atlantic, we should not have any illusions about the seriousness of his political will to implement the things he has promised. America can, as we like to say, reinvent itself again and again. In that country there is indeed great power and no less of a great national emotion. Mr. Trump will play on this piano, in his key. There are three major areas that directly concern us: foreign policy, trade policy and financial policy. There will be an abrupt end to regulation in financial policy and a rollback on a whole series of regulations, which were introduced as a lesson from the financial crisis by consensus between Europe and America.European banks will find it even more difficult to do business in the United States, and the extraterritoriality of the American legal system will continue to pose major problems for European banks outside the United States. Given the dominance of U.S. banks in global markets and the continuing weakness of most European institutions, it will hardly be possible for Europe to deal effectively with this imbalance. The ongoing crisis of the currency union, for its part, contributes to the persistence of this dilemma. In addition, new tax competition should open up further competitive advantages for American companies.
In trade policy, we still regret having contributed so frivolously to the failure of a trans-Atlantic trade agreement. That opportunity won’t come around again any time soon. Experts in TTIP and arbitration will soon see that the foreseeable protectionism in the United States will result in precisely the loss of standards and common rules that they so verbosely conjured up through the TTIP. It was one of the most ironic twists in the past week when it wasn’t the U.S. President nor a representative of Europe calling for open markets and free trade in the world – it was the president of China at the World Economic Forum in Davos. You might have thought you were hearing things! China is not just talking but also acting. Attentive observers are advised to note the abbreviation RCEP: the Regional Comprehensive Economic Partnership for a regional trade agreement in the Pacific region. It was initiated by the Chinese government, tailor-made to their regional and global interests, and from which Japan cannot withdraw if in addition to the TTIP, the TPP, the Transpacific Partnership Agreement with the United States, also fails. RCEP will encompass 30 percent of the world’s gross domestic product and 50 percent of the world’s population. Thus the axes of the political and economic centers of power in the world are shifting.
Then there’s the Trump government’s new foreign policy. Even if the most important cabinet members are making clear commitments to NATO and Western values, the relationship is now being realigned. Europeans will contribute significantly more to their own security and they will finally have to find a common foreign and security policy. 2017, it is now clear, will be a year for the history books!