International Outlook Edited by Rose Brady

Should Europe Spend Big to Modernize Its Military?
It was an historic moment. On Sept. 12, a day after terrorist attacks in the U.S., NATO solemnly invoked a key article in its charter for the first time. From France to Turkey, member countries declared that the attack on the U.S. was an attack on all of them--a decision never taken even in the darkest days of the Cold War.
But the U.S. didn't ask its European partners to join en masse in a retaliatory attack on al Qaeda and the Taliban in Afghanistan. That's largely because Europe lacks firepower--from stealth bombers to precision guided missiles and, crucially, the systems to integrate them. So apart from a few British cruise missiles, reconnaissance flights, and special forces, the U.S. decided to wage its own war and leave Europe on the sidelines. The Europeans "haven't invested enough to plug in to the new kind of warfare," says Klaus Becher, senior fellow at the International Institute for Strategic Studies in London.
Now, as the U.S. ponders moving on to a new terrorist target, debate is growing in Europe as to just what its defense role should be. The Afghan war has starkly highlighted Europe's deficiencies, spurring German Chancellor Gerhard Schröder and British Prime Minister Tony Blair to push for increases in European defense spending. Currently, the EU pumps about 2% of its gross domestic product, or some $205 billion, into the military, vs. the U.S.'s $343 billion, or some 3% of GDP. While no one expects the EU to close the gap, more political leaders are arguing that Europe must boost its capabilities--or be relegated indefinitely to a second-tier role in global military operations. That could mean being sidelined in decisions that affect European interests as well.
The outcome of this defense debate is far from certain. Plenty of groups, from labor unions to the Greens, oppose higher military spending. And the European Monetary Union imposes strict limits on budget deficits, thus precluding a major surge in spending. But proponents of a stronger European military say it's necessary so the Continent can take care of problems in its own backyard, such as the Balkans. And, they argue, a more confident Europe could check what they perceive as American unilateralism. Many Europeans fear the U.S. won't consider their views before deciding whether to target Iraq as a terrorist nation. "There's no [European] leverage," says Henning Riecke, senior fellow at the German Council on Foreign Relations in Berlin. Others worry that European troops will end up only with peacekeeping duties--as in Afghanistan. "We have to do the dangerous, muddy-boots stuff," complains Julian Lindley-French, a British analyst at the European Union's Institute for Security Studies in Paris.
In the end, it may take years for the Europeans to figure out their new defense role. But the issue is likely to gain attention in this year's elections. The French defense Establishment was humiliated when France's sole aircraft carrier couldn't leave port at the start of the Afghan war because it was undergoing repairs. Now, presidential candidate Jean-Pierre Chevènement is making France's military unpreparedness a big campaign theme for this spring's ballot. Meanwhile, Schröder, up for reelection this fall, had to scale back German peacekeeping efforts in Afghanistan because of a lack of transport planes. Now, he is seeking parliamentary approval to buy 73 Airbus military transports--at a cost of $6 billion.
Schröder is likely to get his planes. But these are just initial forays in what is likely to be a major battle over the Continent's resources--and its place in the world. By John Rossant in Paris and Christine Tierney in Frankfurt  
GLOBAL WRAPUP Warning to Jakarta?
In the wake of the arrests of 28 alleged Islamic terrorists by Singaporean and Malaysian police late last year, pressure is growing on Indonesia to crack down on militants. Malaysian police suspect two Indonesians of plotting with other extremists to attack U.S. targets in Singapore. Authorities are also worried about militant groups that have staged violent protests at the U.S. Embassy in Jakarta.
Indonesian Muslim leaders condemned the arrests, revealed in early January. Some Western diplomats see the announcement of the arrests as a warning to Jakarta and a trial balloon for gauging local Muslim reaction. U.S. officials recently suggested militants in Southeast Asia could soon be a target of the anti-terror campaign.  
GLOBAL WRAPUP Italy's Euro-Skeptics
The ouster on Jan. 5 of Italian Foreign Minister Renato Ruggiero could lead to unexpected economic fallout. Prime Minister Silvio Berlusconi asked the highly regarded Ruggiero to resign after he criticized the government's weak commitment to the new European currency. That tilted the balance of power in Rome toward euro-skeptics such as Minister for Institutional Reform Umberto Bossi and Deputy Prime Minister Gianfranco Fini.
While they are not strong enough to derail Italy's overall commitment to Europe, they are working behind the scenes to help Italy delay European Union-driven reforms such as liberalization and privatization. If they succeed, Italy's already-lagging competitiveness could slip further behind the rest of the EU.
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