February 08
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Europe is colder, the economy has collapsed, and the locals are getting nervous. There is only one answer: blame America. Heading across the Atlantic has long been a favorite diversionary tactic of European political elites when things on the continent start to get dicey, Politico reported.

"Whether it’s the war in Ukraine (Washington shouldn’t have expanded NATO), natural disasters (too many American SUVs fueling climate change) or the demise of French as a lingua franca (cultureless Hollywood), America is inevitably the culprit," the author noted.

In the latest installment of this tiresome tradition, European officials try to blame greedy Americans for the continent's current decline, blaming them for putting the mighty dollar above all else, stooping so low that they even took advantage of the war in Ukraine.

“The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” a senior European official vented to my POLITICO colleagues last week.

Sobriety, however, is not a quality that can be confidently attributed to the anonymous accuser.

Leaving aside the fact that Ukraine would have collapsed months ago had the U.S. not intervened, the direct impact of Russia's war on America's $26 trillion economy from natural gas and arms sales is a drop in the bucket.

First, the U.S. exports less than 10 percent of its natural gas. In 2021, the value of those exports was about $27 billion. While Europeans are understandably upset that their gas prices are four times higher than those of the United States, no one has told them to become dependent on Russian gas or to shut down perfectly functioning nuclear power plants.

The accusation of alleged arms speculation in war is equally baseless. Of the roughly $30 billion in military aid that the U.S. has provided to Ukraine so far, most of the equipment has been donated.

While U.S. defense contractors would benefit from a replacement stockpile and higher demand for weapons among NATO allies, their European counterparts should do the same.

And yet herein lies the rub: European firms should benefit as much as American firms, but they don't. The main reason is that Europe has not invested enough in its defense industry.

Germany's recent decision to buy American F-35 fighter jets, for example, was due to the simple fact that there are no European alternatives. A plan by France, Germany and Spain to develop a combat aircraft system of the future" was developed in 2001, but has yet to be implemented amid ongoing strife.

Political resistance in a number of European states to arms exports has further stalled the region's military industry.

Europe's main scare these days when it comes to the U.S. has to do with a set of green subsidies introduced by the Biden administration that benefit American companies.

One of French President Emmanuel Macron's top priorities during his state visit to Washington this week will be easing the provisions of the Inflation Reduction Act (IRA), a sweeping legislative initiative covering everything from climate to health. European officials describe it as a reincarnation of the Smoot-Hawley Act, a catalog of tariffs introduced in Washington in 1930 that historians blame for worsening the Great Depression.

Europeans fear the subsidies will undermine their industries and threaten a trade war. The inconvenient truth, however, is that Europeans are having a hard time getting their own companies to invest at home because governments are focusing more on subsidizing household gas bills than on helping the region's industries deal with the crisis.

“Europe is not cost-competitive in many areas, in particular, when it comes to the costs of electricity and gas,” Thomas Schäfer, who runs the Volkswagen brand, said in a post on social media slamming Europe’s industrial policy. “If we don’t succeed in quickly lowering energy prices in Germany and Europe, then investments in energy-intensive production, or for new battery cell factories, in Germany and across the EU will no longer be feasible,” he said.

Nevertheless, ask the government quarter of Berlin what's really holding back the German economy these days, and the answer is clear. “The U.S. is pursuing a massive industrial policy with protectionist tendencies,” Lars Klingbeil, co-leader of German Chancellor Olaf Scholz’s Social Democrats, told Die Welt last week. “It shouldn’t be that U.S. economic policy is targeting us Europeans.”

The sad reality is that the Biden administration probably wasn't even thinking about Europe when it decided on the subsidies. That fact alone should make Europeans think twice.

The problem is not that Europe does not matter to the U.S., but that it is not as important as Europeans would like to believe. When it comes to innovation, Europe is a desert. There is no Apple, Google or Tesla in Europe. Indeed, the market value of Tesla is four times higher than that of the entire German auto industry.

This is why it is hard not to conclude that Europe's blame game is actually about something else: envy. Despite America's political differences, the country has never been stronger in terms of its military might or its economic muscle.

Meanwhile, Europe has become more dependent on the United States than it has been since the Cold War, a fact that fuels both resentment and the blame game.

In Germany, a book called "Ami, It's Time to Go!" ("Ami" in German slang for Americans) has become a bestseller. The author is Oskar Lafontaine, a former finance minister who once led the Social Democrats before breaking with the party. “We have to free ourselves from the tutelage of the U.S.A.,” Lafontaine writes, describing America as the root of most evil and arguing that Europe needs to blaze its own path.

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