Once upon a time there was a European dream. The democracies of Western and, later, Eastern Europe set out to create a more perfect union which would allow them to end centuries of conflict. This has been accomplished: it is hard to see Europe ever being the site of a world war again and even a Yugoslav-type civil conflict seems remote. These European governments also argued that their union would produce a post-modern, value-based political structure that would best embody the philosophy of the Enlightenment. This can still be argued, at least if one goes by the written laws, rules and goals of the European Union. However, the increasing strength of anti-immigrant, Islamophobic and otherwise intolerant political movements in many parts of Europe are putting this claim to the test.
Finally, the New Europe was to also become an economically competitive powerhouse. Together, the European States would generate synergies that would ensure this continent would remain ascendant for another century or two. The embodiment of this belief was the creation of a single market and a single currency. The travails of this past year, in which Europe became the world's main source of economic instability, have made this claim to be especially hollow. It is not merely that Europe's political elites have struggled to come to grips with their collective debt crisis. It is that, in all this, Europe has yet to even look seriously at the sort of policies it needs to make itself economically viable in the coming decades. The European Union, by almost all measures, has seen its global competitiveness erode steadily over the past few decades. The Lisbon Treaty and various other commitments sought to address this issue. Other than pieces of northern Europe, nothing much has happened on this front - and the euro crisis and its aftermath make it even less likely that anything will be achieved. The European Union was, at least academically, seen as a model for other regions of the world. The nations of South and Southeast Asia, West and Southern Africa were among those that tried, at least in spirit, to emulate the transnational successes of Europe. Liberal internationalism and multilateral harmony will remain part of the global firmament. But it will be a brave person who will today cite the European Union as empirical evidence that this is the path forward. Europe is at peace. But if the price of peace is parochial politics and declining prosperity, there will be few takers.
This may be the greatest legacy of 2011: the death of a Euro-pean dream that sought to be a beacon for the rest of the world. Europeans like to claim their union will emerge stronger from its present crisis. There is a very slight chance of this happening. Demographics, local politics and declining competitiveness will make it harder for Europe to succeed, even if it irons out the crumpled state of its institutions. The window of opportunity was there, and it is closing fast on what its own statesmen admit may soon be seen as little more than the western peninsula of a rising Asia.