27th Oct 2016

US think tank: 'Let the eurozone fail'

  • The US think tank gives an insight into what a Romney presidency might mean for Europe (Photo: Mitt Romney)

Speak with most American officials about the EU and they will talk about the bloc as a partner and strong ally of the US.

Criticism of the 27-country bloc is reserved for the ongoing eurozone debt crisis and the spill-over effects of the currency union's austerity programmes and recession.

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But this is not the case for the Heritage Foundation, a prominent think tank in the US capital.

To meet with the Heritage Foundation's policy experts is to be transported back to the days of the Bush administration.

Heritage is fiscally conservative, hawkish on the Middle East and on defence spending and eurosceptic. It also claims that man-made climate change is a myth. In the reception of its Washington offices the screens advertise events entitled "The US should withdraw from Unesco [a UN cultural body]" and "Why free markets are moral and big government is not."

The only props missing are life-size portraits of Ayn Rand, the Russian-American philisopher of laissez-faire capitalism.

The size of the 1973-founded Heritage is immediately striking.

Its €80 million annual budget pays for 280 staff, including 100 researchers on public policy. No European think tank can even come close to this level of financial muscle.

Its senior policy wonk Ted Bromund says that Heritage has over 700,000 members paying dues and receives just 2 percent of its funding from corporations. It is also among the most influential US think tanks, ranked 5th in 2009 by Foreign Policy magazine and recently co-hosting the foreign policy debate between the Republican party's presidential candidates.

But if most American politicians and think tanks are uninterested in Europe, Heritage breaks the mould, even if it speaks the same language as British eurosceptics such as MEPs Daniel Hannan and Nigel Farage.

A recently-drafted Heritage paper on "Five conservative principles that should guide US policy on Europe" sets out a clear new path.

It says the US "must end its support for political and economic integration in the EU, which has only encouraged the drive toward the creation of a fundamentally undemocratic federal Europe that is frequently anti-American in outlook."

For Bromund, the eurozone was "always a political rather than an economic project" and was inevitably going to face the problems thrown up by the sovereign debt crisis.

The US "should not support any further IMF [International Monetary Fund] bailouts" he told this website.

Of the eurozone itself, he added that the EU, led by Germany, is driving the southern Mediterranean member states off a cliff. He said the single currency will not survive in its current form because keeping all of its members on board would require Berlin to write annual cheques to the eurozone's poorest nations.

The "old EU was about containing Germany, now it is Germany," he noted.

On the implications of a potential EU banking union, he said Europe must ensure any new rules do not discriminate against the US and other foreign countries.

The Heritage path looks to beef up transatlantic relations with the UK, Poland and the Czech Republic and with Nato rather than with the EU as such.

Bromund even suggested US officials "should not deal with the EU" but only with member states. He dismissed the EU's foreign policy chief, Catherine Ashton, as "a non-entity" who is "not worthy of respect."

Despite his antipathy toward Obama, Bromund noted that even the current administration is "the first [one] not to regard Europe as the most important part of the world."

He alos said that a Romney presidency would focus more on reaching out to India and seeking better relations with allies in central and Latin America.

In Europe, Romney should reach out more to Britain, Poland and the Czech Republic. Obama "is not terribly interested in foreign policy and would like it to go away."

There is something refreshing about Heritage's candour and its willingness to put its head above the parapet.

While it would cause surprise if a Romney presidency sidelined the EU completely, the influence of the Heritage Foundation should not be underestimated.

The think tank expects to provide several staffers for a Romney White House - for EU leaders expecting a US government sympathetic to its attempts to overcome the crisis, the prospect offers food for thought.

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