The Transatlantic Economy: The Dog That Has Not Barked

During the Cold War, strategists constantly fretted that transatlantic economic disputes would undermine the political foundations of the Atlantic Alliance.

Differences over agricultural subsidies, trade protection, investment rules and currency policy, they feared, would lead to political tensions so great that they would sap the solidarity on which NATO depended, possibly even leading to a departure of American troops from Europe that would leave the continent vulnerable to Soviet attack.

In the end, the alliance survived. Repeated and sometimes quite fierce economic disputes came and went, but the West held firm and eventually won the Cold War. In retrospect, the reason was simple: both America and Europe had a profound, mutual stake in their political and security alliance, and both realised it would be folly to put that interest at risk over textile tariffs or subsidies for milk.

Today, the concerns about ‘spillover’ between politics and economics seem to have reversed. Now, it is mostly business leaders who worry that the transatlantic economic relationship will be affected by political tensions, not the other way round. And while no one should be complacent about US-Europe economic ties at a time of political turmoil, recent experience suggests the new worries may be as misplaced as the old ones. For the reality is that despite the real and deep transatlantic political crisis of the past several years, the US-Europe economic relationship has not faltered, but flourished.

This article was reprinted with permission of E!Sharp