From Sarajevo in 1914 to an EU in Crisis

June 26, 2014 | 2323 GMT

In 1878, Otto von Bismarck gave a stark and uncannily prescient warning to the European and Ottoman political elite assembled at the Congress of Berlin. The purpose of the meeting was to discuss the reorganization of the Balkans in light of the Ottoman Empire's continued decline. The aging Iron Chancellor alerted that the Continent was on the verge of a ravaging conflict that would be sparked by "some damned foolish thing in the Balkans." Left unsaid was that it was not the decline of the Ottoman Empire threatening peace in Europe -- although that certainly kindled the conflict -- but the very existence of Germany, forged by Bismarck's own hand. As we approach the 100th anniversary of the beginning of World War I, it is useful to appreciate how the underlying principles that defined the carnage of the 20th century remain in force today.

Some three decades after Bismarck's admonition, a young Bosnian Serb fired two point-blank shots on June 28, 1914, that would change the very nature of European life and thought, toppling empires and killing millions in the process. Much has been made of the assassination of Archduke Franz Ferdinand and his wife. Though it did specifically trigger the hostilities that activated the complicated network of European military alliances, it merely provided convenient pretext for an inevitable war brewing between the Continent's true powers.

The question that defined the years between the unification of Germany in 1879 and the end of World War II in 1945 was what role Germany would play in Europe. The relatively rapid emergence of a massive military and economic power at the heart of Europe radically disrupted the balance of power in the Continent. Though undoubtedly powerful, Germany's central position between France and Russia also made it feel highly vulnerable.

And geography was not the only vulnerability that preoccupied the high command in Berlin. By the beginning of the 20th century, France was emerging in force from the political and demographic slump that followed the end of the Napoleonic wars and was rapidly catching up with Germany, which was spending a sizeable chunk of its annual revenue on a fruitless bid to build a navy that could break through the British Empire's control of the North Sea. To Germany's east, Russia was beginning to adopt political and technological reforms that would allow it to translate the wealth and population of its massive yet backward empire into a credible military force. Each additional mile of railway that Russia laid toward Europe

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escalated the existential threat in the eyes of Berlin. War was inevitable from the German perspective; both Russia and France had to be neutralized sooner rather than later.

But the reason for going to war remained of paramount importance: Germany still wanted to keep the British Empire out of the war, something it could not do if it attacked France unprovoked. The troubles in the Balkans provided an excellent excuse to make war. The assassination of Archduke Ferdinand tipped the first piece in the neatly arranged line of dominoes that had been set up over decades of increasing concern and paranoia from the higher echelons of Germany's leadership.

Berlin had worked diligently to give sclerotic Austria-Hungary every possible guarantee of support as Vienna tried to contain the Balkan nationalism that festered in the former Ottoman provinces of southern Europe. This in turn brought Austria-Hungary in direct conflict with Russia's own support for Slavic (and Orthodox) Bulgarians and Serbs.

Many of Berlin's assumptions about how things would proceed from there proved wrong and cost them dearly: the British did join the war, the French discovered a new form of defensive warfare in the trenches that nullified the German tactical and military edge, Austro-Hungary proved more militarily incompetent than Germany anticipated and, critically, the United States broke its policy of isolationism.

But these reverses should not hide the fact that Germany's actions sprang from a calculated and logical understanding of its inherently unsafe position on the North European Plain, sandwiched as it is between two formidable powers. World War I did not resolve Germany's dilemma, and after an uneasy two-decade truce, war convulsed Europe once again. The half century-long occupation and partition of Germany by the two hegemons that emerged from World War II testified to the ongoing question of what to do about Germany, a nation more powerful than each one of its neighbors but unable to subdue them all at once.

The answer engineered by American and European leaders after World War II was to return Europe to prosperity and, via a common market, link this prosperity to Germany's remaining peaceable. Issues of military buildup were addressed by keeping the majority of the Continent's defense burden on the United States. This is the core of the EU paradigm that has held the Continent together for the past six decades.

This socio-political contract hinges on a very important conditional clause: that Germany be wealthier and more secure participating in this bargain than it would be by not participating in it. As long as Europe's economy boomed and the European Union continued to expand farther across the Continent, the deal made sense for Germany. The financial crisis that began in 2008 became the first dark cloud on this horizon of seemingly endless prosperity and peace.

Unlike the United States, the European Union has been unable to prevent the financial and economic crisis from becoming an acute social crisis, with unemployment levels in Southern Europe rivaling those of the Great Depression. Germany has so far been spared, but the market upon which its post-war prosperity depends so heavily is fraying. The crisis is now migrating northward from the blighted Mediterranean, and France looks to be the next crisis hotspot as it continues to be unable to reform its social spending programs.

It is becoming increasingly apparent to Berlin that eventually Germany will have to heavily commit its own wealth if it wants to avoid a socio-economic catastrophe in the Continent; there

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is simply no one else who can step up and fill that role. For now, this remains in Germany's interest, but the interesting question is: What happens when it does not? Most likely, the contract breaks, and the Continent return to its pre-1914 state -- bringing the German question back to the fore.

To be sure, there is still some hope for the contract to hold together. The European Union could yet manage to weather the slump indefinitely, settling for a future of comfortable stagnation like Japan. Europe could also somehow achieve true political and economic union and return to the global superpower table. But the last eight years of unrelenting stress in Europe and the accompanying rise in radical political parties so far give little cause for such hopes.

Source: Stratfor; http://www.stratfor.com/sample/geopolitical-diary/sarajevo-1914-eu-crisis

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