World Naval Developments

By Norman Friedman

Another interesting feature of the December raids was the constant mention of Ramadan, the Islamic holy month. Most commentators accepted the official explanation, that the Western governments did not want to upset Moslems by attacking during their specially holy season. They missed the point. Much of the attack was mounted from land bases in Saudi Arabia and in Kuwait. The governments of those countries, quite rightly, had a veto over attacks from their soil. They were the ones to decide whether coalition bombers could or should take off during Ramadan. In some cases, they exercised their vetoes.

As in the past, these operations demonstrated that the only secure base in a forward area is an aircraft carrier—U.S. territory, in effect. Nothing flying from the United States can provide sufficient numbers of sorties or of weapons on target in a given time; tactical air power requires some base near the battle. If the base is on someone else's sovereign territory, then it is subject at the least to a veto. That is quite aside from vulnerability to sabotage or direct attack, as was the case in Vietnam. It was apparently a previous veto that convinced the British government to buy two new carriers, much larger than the current three Invincibles project British power abroad. Perhaps it is time to demand that all Air Force tactical aircraft be carrier-capable, as otherwise they cannot perform many of their missions. Or, perhaps, there ought no longer to be a separate land-based tactical air force.

Maybe the Euro-lesson has a direct military corollary. The European Union is in deep, and probably deepening, economic trouble because its semi-government wants to force its worst practices on all its countries, under banners of "fairness" and "harmonization." That goes far beyond the original idea that free trade would help everyone. In our own case, jointness began as the military equivalent of free trade: a commander always ought to be able to use whatever forces the country has, whatever uniforms are involved. Now it has gone much further, to the military equivalents of "fairness" and "harmonization." The British Euro-skeptics have long argued that the most valuable thing about Europe is its diversity, that the Union ought to protect that diversity, which includes diverse economic and social policies. The Europeans have opted for common policies. One could argue that defense also benefits from diversity. For example, the Navy's unique culture is probably a result of its domination by line officers; the Army and Air Force are more staff-led. Jointness means a much higher degree of uniformity. Does the United States really benefit from that? Do the Europeans really benefit from a uniform economic and social policy?

The Euro May Not Be the Answer

On 1 January 1999, 11 European countries adopted the Euro as their new international currency. For the moment, their citizens will continue to trade in traditional currencies such as Francs and Deutsche Marks; the conversion rates between these currencies and the Euro will be fixed, however. At least as significantly, the central banks of all II countries will be subordinated to a new European Central Bank in Frankfurt, Germany. In a few years, the national currencies will disappear altogether, to be replaced by Euro bills and coins. These abstruse financial developments have considerable significance, both for European navies and world events.

The European economies have not been doing well for a long time. Although the usual indicators of economic health, such as gross product, suggest prosperity, at the street level the perception in countries such as France and Germany is quite different. Unemployment is high, well above 10%, and it is probably concentrated among teen-agers completing school. European integration (of which the Euro is one aspect) has long been sold as a way of solving this sort of problem. Skeptics point out that the potential for economic improvement probably was exhausted when customs barriers were effectively eliminated many years ago. Since then the European Community (now the European Union) has moved in the direction of greater bureaucracy and micro-management.

The real problem is probably social policy. In order to achieve or maintain social peace, countries like France mandated extreme worker security. For example, in many cases, once a worker has been with a firm for six months' probationary period, he is almost impossible to fire. There also is very generous social security, including high payment for those who become unemployed. Unfortunately such measures are expensive, and employers find it difficult to hire entry-level workers.

Governments are aware of the problem, but they cannot solve it easily. When the French government tried to do so a few years ago, it faced a general strike—which, in effect, it lost. Later, the discontented French voters rejected the conservatives who had proposed the necessary cuts in social programs; but the current Socialist government is doing no better. The French have been outraged further that, under European Union rules, some of their companies have realized that they can do much better if they move operations to Britain, where social programs are much less expensive (so taxes are much lower), and where hiring and firing are much easier to do. The solution currently in vogue within the European Union is to reduce the "unfair" advantage the British enjoy by forcing them to adopt the sort of high taxes common in France or Germany. There is also pressure, some of it generated within Britain, to adopt continental style social policies.

None of this suggests that any of the European economies is likely to prosper in the near term. The main exception on the continent is probably the Netherlands, where the social policies have been end-run by heavy use of temporary employees, i.e., employees who do not enjoy the sort of protection the formal legal system envisages. Presumably any attempt to introduce Dutch-style labor practices in France or Germany will lead to an attempt to end them in the Netherlands itself, because such attempts to end-run central European Union policy are clearly "unfair."

What has all this to do with navies? Quite simply, it means that the European navies are likely to find money harder and harder to come by, since their economies are unlikely to grow very quickly. Moreover, if unemployment continues to be high, whatever additional taxes are taken in will have to go into social programs. Germany is of course a special case, in that unemployment in what used to be East Germany is probably something like 20%, and much of what employment there is, is in government-funded programs.

There is a darker side, too. Massive youth unemployment is a recipe for trouble. With the end of the Cold War, armies have shrunk dramatically; the French are abandoning the draft in favor of a much smaller professional force. That alone is likely to add to unemployment, since the draft subtracted a year from a man's potential working career. If jobs are not being created, then that year may be an idle one. There is much talk in France of job training, but the central problem is most likely that the social security system makes it so difficult to create jobs in the first place. At the least, it often prices French products out of the world market. (See "A French Expeditionary Force Without Conscripts," pages 65-68.)

Now for the Euro. The new central bank has the power to control inflation across Europe. The Germans have been obsessed with controlling inflation, even at a high cost in unemployment, since the ruinous days of the 1920s. The French, on the other hand, traditionally have used inflation to create jobs, on the theory that the main danger to the country is social unrest. Now both (and nine other countries, too) are yoked into a common monetary policy, which likely will satisfy no one. It will, instead, convince many Europeans that the Union is less than a solution to their very visible problems.

It seems obvious that the Euro is a step toward creating a United States of Europe. Less obvious is that the referenda that approved the treaty creating the Euro, the Maastricht Treaty, passed with very thin majorities; many voters later said that they would have disapproved had they known more. In the major European countries the issue of integration has not been debated. The legitimate parties support it, even when public opinion polls (as in Germany) are distinctly cool to the idea. One might be forgiven for thinking that such support largely reflects expectations that all parties will enjoy the bounty of the Euro-bureaucracy (which is currently suffering a series of major corruption scandals).

Europe has: economic stagnation, an army of young unemployed workers, and a disconnect between the main political parties and most voters. Doesn't that leave the fringe parties with increasing power? Haven't we been there before—say in 1932-33 in Germany?


Norman Friedman is a consultant on global naval strategy, naval trends, and naval warfare. An internationally known military technology analyst and naval historian, he worked for a decade as an advisor to Secretaries of the Navy, and for another 10 years with a leading U.S. think tank. Dr. Friedman travels the world speaking to military and defense industry leaders, and appears frequently appears on television as a guest commentator. He has authored more than 30 books, and has since the 1980s contributed regular columns analyzing world naval developments for Proceedings magazine. His PhD in Physics was earned at Columbia University.

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