Europeans are in shock about the Trump presidency. ‘Is this administration sad, mad, or outright bad?’ they ask themselves amid the ruins of the Atlantic alliance and what some fear even is the impending end of Nato.
For optimists, a talentless collection of lackeys and grifters, led by a rough-tongued huckster, will mean more chaos than anything else. Some parts of the US government will simply stop functioning. Other bits will run on autopilot. It is sad, but allies will have to manage as best they can.
A more pessimistic take is that eccentricity will triumph. Conspiracy theorists and nutcases really are in charge. As they hunt for the truth about the JFK assassination, the moon landings, and vaccines, madness will reign in Washington. Truth and reason give way to hysteria and myth. It is not just goodbye to transatlanticism, but to the values of the Enlightenment.
Even more worrying is the idea that there may be method in the madness. The administration wants to befriend Russia at all costs — and is ready to throw not just Ukrainians, but all Europeans to the wolves in order to do it.
The answer may be a mixture of the above, or none.
Europeans sometimes forget how tortured and burdensome transatlantic relations have been in the past.
Treat what we see as episodes of reality TV and they become more dispiriting than alarming. In any case, instead of fretting about events they cannot control, we should instead be making decisions on things that lie within our power.
That is why I along with Belgian, French, Polish and other allies have spent the past few weeks promoting the idea of a Rearmament Bank.
This would do for defence what the European Bank for Reconstruction and Development (EBRD) did for the countries emerging from communist captivity after 1991.
It would be publicly-owned, but would borrow money (long-term and cheaply thanks to its excellent credit rating) and lend it out to boost arms production.
With a modest amount of paid-in capital — say €10bn — the bank could raise many times that. It would start with a small group of European Nato allies that are most acutely aware of the defence emergency.
Later, others could join too, adding more capital and thus more lending firepower.
This would not be an EU project, bogged down in Brussels decision-making (and vetos from countries like Hungary).
It would be a coalition of the willing, including non-EU Britain, where finance minister Rachel Reeves has already told her civil servants to investigate and develop our proposal. The main backer is Poland, where the government is actively working on a plan to present to the European Council meeting on 6 March.
We have also had positive reactions from Nato, the European Commission and from decision-makers in France, Germany and other countries.
This project can go ahead quickly.
My colleagues, who include veteran bankers and lawyers who helped found the EBRD, have drafted the most important documents. The model is tried and tested. We do not need to invent some elaborate new institution, just to copy a successful old one.
Our idea also complements existing efforts.
The European Investment Bank, for example, is ideally suited to finance infrastructure, such as the roads, railways, ports and storage facilities needed for military logistics. The European Defence Fund can support innovation. With more flexibility in the Growth and Stability Pact rules, governments can borrow more for defence too.
But only our proposed bank taps Europe’s vast private savings pool.
We also aim to fix Europe’s parochial procurement system. The Rearmament Bank will insist on high standards of interoperability, and prize speed and agility over elaborate, slow, gold-plated projects. We will stick to sound banking principles: loans must be profitable, not boondoggles.
The bank will be profitable, but not profit-maximising. And it will be temporary: once the defence emergency is over, it will stop lending and run down its loan book.
A speedy decision on setting up the bank will send powerful signals.
It will create momentum in Europe: the bus is moving, so jump on board. It will show that the Brexit wounds are healing. It will show Vladimir Putin that Europe is serious, boosting our deterrence. It may even make an impact in Donald Trump’s White House.
Who knows, effective decision-making in Europe might even become a habit.
Edward Lucas is a British writer and consultant specialising in European and transatlantic security.
Edward Lucas is a British writer and consultant specialising in European and transatlantic security.