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F O R E I G N S E R V I C E J O U R N A L / F E B R U A R Y 2 0 1 2
stronger central control over na-
tional budgets, authorizing the use
of such tools would only allow
spendthrift nations to live beyond
their means and drag down the
credit rating of the entire European
Union. The early months of 2012
will indicate whether Europe is able
to take historic steps to create a fis-
cal union and to make correspon-
ding expansions to the powers of the
European Central Bank.
If Europe does demonstrate that it is ready to take the
necessary hard steps, it surely will be possible to mobilize
expanded financial resources from the International Mon-
etary Fund, and even frommajor creditors, such as China.
But as of now, such investors have not seen sufficient signs
of resolve to believe that such investments can be justi-
The Challenge for State
The trans-Atlantic alliance cannot solve the euro debt
crisis; Europe must do that mainly on its own. Even so,
Washington should seek ways to help. As Europe works
to resolve the euro crisis, the U.S. and the E.U. would do
well also to consider how to renew their durable partner-
Ten years after the 9/11 attacks, we can see just how
greatly the last decade reshaped the contours of American
diplomacy. For more than 10 years, the best and bright-
est U.S. diplomats have concentrated much of their ener-
gies on Iraq, Afghanistan, Pakistan and related aspects of
the war on terror. The United States devoted enormous
budget resources and high-level policy attention to chal-
lenges in the Middle East and Central Asia.
As a result, the policy agenda for the European Union
and the United States stalled and increasingly became
dominated by “out of area” missions. During my last years
at the State Department, U.S.-E.U. summits tended to
focus on aligning policies to stabilize Iraq and Afghanistan,
and contain Iran. As important as those efforts were, it ap-
pears to me in retrospect that we could have done more to
integrate the European and American economies, and to
harmonize our approaches to economic issues.
One can hope that during the next generation, the U.S.
and E.U. can devote more attention to Asia, to common
economic objectives such as promoting development and
trade, and to setting an agenda for
deeper trans-Atlantic economic co-
operation and integration.
If Europe is able to devise a suc-
cessful recovery program, with tar-
geted political and economic
support from Washington, there is
every reason to believe that the
trans-Atlantic alliance can be revi-
talized. Europe and the United
States can continue to play a deci-
sive role in shaping the economic, political and security in-
stitutions of a new globalized and multipolar world, and
the rules that govern them.
The European debt crisis is also a wake-up call on the
changes that are needed for State and the Foreign Service
to adapt to the challenges of the 21st century. In this re-
gard, it is fortuitous that Secretary of State Hillary Rod-
ham Clinton launched the Quadrennial Diplomacy and
Development Review, completed in 2010.
I believe the QDDR’s recommendations in the eco-
nomic policy area are right on the mark. They should be
implemented and even expanded upon.
It is very important that future Secretaries of State be
supported by a stronger economic function. I welcome
the expanded responsibilities contemplated for the Under
Secretary of State for Economic Affairs, the creation of a
new energy bureau and the creation of the position of a
State Department chief economist.
In addition, I believe that the Foreign Service needs to
recruit more officers with strong economic and business
backgrounds. The Foreign Service Institute’s in-house
program of economic training should be sustained, and the
university economic training program should be expanded.
Interagency coordination, especially among State,
Treasury and the National Security Council, should be
strengthened in both formal and informal ways. For ex-
ample, I recall great value arising from the regular break-
fast meetings that Secretary of State George Shultz,
Secretary of Treasury James A. Baker III and National Se-
curity Adviser Colin Powell, together with senior advisers,
held during the Reagan administration. That model
should be followed again.
In short, the euro zone crisis has furnished Foggy Bot-
tom with a case study of the types of challenges it must
tackle in the future. To meet them, State must once again
reinvent itself.
The QDDR’s
recommendations to
strengthen State’s economic
policy capability are
right on the mark.