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No personage stands closer to the center of the American foreign policy establishment than the president of the Council on Foreign Relations, and it is something of a milestone when the current holder of this office, Richard Haas, writes in the May 12 Financial Times, “Goodbye to Europe as a high-ranking power.”

The European project is foundering.Greece is the most pronounced problem, one brought about by its own profligacy and a weak EU leadership that permitted it to live beyond its means and violate the terms under which the euro was established. But the crisis was made worse by German dithering, and initially timid responses from European institutions and governments. The euro could be one of the casualties.

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Time and demographics will not improve the situation. Europe’s population has levelled off at about 500m and is rapidly ageing. By mid-century the percentage of Europe’s adults who are older than 65 is projected to double. Fewer will be of military age; a smaller number will be working to support the retired.

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The combination of structural economic flaws, political parochialism and military limits will accelerate this transatlantic drift. A weaker Europe will possess a smaller voice and role. Nato will no longer be the default partner for American foreign policy. Instead, the US will forge coalitions of the willing to deal with specific challenges. These clusters will sometimes include European countries, but rarely, if ever, will the US look to either Nato or the EU as a whole. Even before it began, Europe’s moment as a major world power in the 21st century looks to be over.

That has a number of implications, for example, in the Middle East, where Europe—in part to appease its growing Muslim population—has been the strongest proponent of enforcing a settlement on the Israelis and Palestinians. As Haass wrote last week in an op-ed in the Wall Street Journal [subscription only], trying to formulate the “contours of a final settlement is a distraction that would benefit neither the U.S. nor Israel, given an Iranian threat that is close at hand and a promise of peace that is distant.”

Haass ridiculed the “linkage” idea promoted by President Obama and his team, including CENTCOM Commander Gen. David Petraeus:
But it is easy to exaggerate how central the Israel-Palestinian issue is and how much the U.S. pays for the current state of affairs. There are times one could be forgiven for thinking that solving the Palestinian problem would take care of every global challenge from climate change to the flu. But would it? The short answer is no. It matters, but both less and in a different way than people tend to think.

Take Iraq, the biggest American investment in the Greater Middle East over the past decade. That country’s Shiites, Sunnis and Kurds are divided over the composition of the new government, how to share oil revenues, and where to draw the border between the Kurdish and Arab areas. The emergence of a Palestinian state would not affect any of these power struggles.

Soon to surpass Iraq as the largest U.S. involvement in the region is Afghanistan. Here the U.S. finds itself working against, as much as with, a weak and corrupt president who frustrates American efforts to build up a government that is both willing and able to take on the Taliban. Again, the emergence of a Palestinian state would have no effect on prospects for U.S. policy in Afghanistan or on Afghanistan itself.

What about Iran? The greatest concern is Iran’s push for nuclear weapons. But what motivates this pursuit is less a desire to offset Israel’s nuclear weapons than a fear of conventional military attack by the U.S. Iran’s nuclear bid is also closely tied to its desire for regional primacy. Peace between Israel and the Palestinians would not weaken Iran’s nuclear aspirations. It could even reinforce them. Iran and the groups it backs (notably Hamas and Hezbollah) would be sidelined by the region’s embrace of a Palestinian state and acceptance of Israel, perhaps causing Tehran to look to nuclear weapons to compensate for its loss of standing and influence.

Were Obama to attempt to impose a settlement on Israel, the Europeans would be his instrument of choice, Israeli officials observe, as I wrote on an On The Square column last week. The perception in the American establishment of Europe’s decline makes Europe’s diplomacy far less credible.

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