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Monica and the Euro - Some See a Connection

Two subjects dominated conversations with friends during a May-June tour of Norway, Denmark, Germany, France, and Britain: The evolution of the European Union and President Clinton's troubles.

Uppermost in the minds of many with whom we talked was the introduction of the new European currency, the Euro, destined to go into circulation next year. This was true even in Britain, still debating about whether to join the European Monetary Union (EMU). Only in wealthy Norway, which has opted out of the European Union, was the subject rarely mentioned. One friend, a former member of the Norwegian parliament, seemed more concerned with the high cost and effectiveness of Norway's foreign aid.

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Meeting the requirements for participation in the EMU has sparked an economic revolution in member countries. Liberal welfare programs are being curtailed. Industries and services traditionally in government hands are being privatized.

European welfare programs have long been both the envy of many in the United States and a basis for ideological criticism of the continent's socialist ways. Such programs have provided full health services, unemployment compensation, and generous social security. Increased costs of services and sustained unemployment have placed new burdens on budgets.

In Germany, for example, roughly 50 percent of a worker's hourly wage is deducted for health and insurance benefits. The deduction was based on an estimate of 3 percent unemployment; the federal government was to absorb costs above that. With unemployment above 10 percent, budget subsidies have risen. European politicians are as reluctant as their US counterparts to raise taxes.

The Air France strike that threatened to disrupt World Cup travel was a manifestation of the resistance to privatization. Only reluctantly did pilots ultimately accept pay reductions compensated for by stock in the newly private company.

Beyond these issues, there is other resistance to creating a new Europe. Complaints are common in newspapers and discussions about the excessive power of the European Commission in Brussels. This was a central issue in the EU ministerial conference in Cardiff last week. Whatever the difficulties, however, a visitor gains the impression that the momentum, at least toward economic integration, is irreversible.

Possibilities of political union and a common foreign policy are much less clear. In Germany and Britain, friends expressed embarrassment at the inability of continental countries to deal successfully with the Bosnian crisis. They share the view of many in the US that Europeans should be able to manage European problems, but acknowledge that European security requires a continuing US role. And this is where concern over the president's troubles in Washington enters the picture.

Among Europeans, the current scandal-related maneuverings in the US capital create both puzzlement and worry. They don't understand either the legal or political elements involved; the complicated scenario of president, courts, special prosecutor, and various women leaves them baffled. Few seem aware that perjury and obstruction of justice are issues. The scandals are seen only as a manifestation of America's prudish sexual mores. On a continent where history, ancient and modern, has produced numerous examples of extra-marital affairs carried on by prominent personalities, the "fuss" over President Clinton's alleged indiscretions is simply not understood.

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But European reactions stem not only from a fascination with scandals and the strange attitudes of Americans but also from a genuine concern that the president's problems detract from Washington's capacity to deal with major world issues: the Middle East, Kosovo, the sub-continental nuclear race, UN financing, and others. Efforts by the administration to convince the world otherwise have not fully succeeded.

The successful integration of Europe and the problems of the president in Washington may seem quite separate, but they quickly meld together in conversations. To many Europeans, at least, what happens in the US is still critical to their future. As one friend said, "We do not have a vote in your elections, but whoever wins the presidency of the US becomes one of the most important persons in our lives."

* David D. Newsom, former undersecretary of state, is Cumming Memorial Professor of International Affairs at the University of Virginia.

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