Even before the approval of the EU bailout package, representatives from the European Union and heads of state were aggressively courting investments from China. China’s involvement in the EU bailout package should come as no surprise. The United States, Europe’s historical ally and creditor, is in no position to assist, given its own budget issues and stubbornly high unemployment rate. China, on the other hand, has a growth rate of around 9 percent and a $3.2 trillion reserve on hand. Furthermore, Europe represents China’s largest export market, and a decrease in European demand would lead to economic difficulties in China. But despite the alignment of interests, Europe will have to make serious concessions in exchange for an anticipated $140 billion Chinese investment in the newly formed European Financial Stability Fund (EFSF). Some of these concessions may be diplomatic, such as turning a blind eye to China’s human-rights violations, while others may come in the form of removing existing trade sanctions or anti-dumping measures. Most troublingly for EU unity, however, is that China’s activity may inadvertently spark competition between states for investments and ultimately divide EU policy.

For some Euro watchers, this arrangement between Europe and China is only the latest example of “the scramble for Europe”. Borrowing the phrase from the 19th century competition between European states to acquire colonies in Africa, skeptics use the term broadly to argue that the surge in Chinese acquisitions of European companies and related investments will undermine European competitiveness. In the words of a French official, “It’s a real war, with highly subsidized companies coming to open markets with unusually low prices and undercutting the competition.” Moreover, this may lead to a split EU policy on China, with “cash-strapped deal-seekers”, like Portugal, Italy, Greece, and Spain (PIGS), simply seeking investments, while “frustrated market-openers” like Germany and France seek a united European consensus to protect domestic firms both in Europe and abroad in China.

Especially in the eyes of countries like Germany and France, China’s investment patterns in Europe present a concern. A disproportionately large percentage of China’s global investments are in Eastern Europe (10%) and PIGS (30%) – the traditionally weaker EU economies. Combined with the fact that Chinese firms have been beating out European firms for large public-sector contracts in Bulgaria, Croatia, Greece, Poland, Romania, Serbia, and Slovenia, this leads wealthier EU states to eye China’s intentions warily.

Undoubtedly, this arrangement has real benefits for weaker EU states, which can now obtain infrastructure at fire sale prices. However, the lack of transparency of many Chinese corporations is a cause for concern. Although EU law forbids state-run companies from bidding for public contracts, many Chinese multinationals that bid for these contracts have close ties to government, maintain a shadow party structure, and most importantly, obtain government subsidies, which give them a further leg up on their European competitors. Furthermore, Chinese firms can keep costs lower than their European competitors by importing low-cost laborers from China and paying them significantly less.

Why is this a problem for European unity? While poorer EU members see only the benefits of discounted costs, wealthier EU members see anti-competitive practices as harmful for domestic firms. Furthermore, when European firms from wealthier nations go abroad, they are frustrated by China’s lack of reciprocity. While European firms are nominally allowed to bid for projects in China, they rarely win, as the rules are skewed almost always to favor domestic firms. Therefore, the vast majority of China’s internationally known mega-projects such as the Three Gorges Dam, Olympic stadiums, and bullet trains are administered instead by the National Development and Research Commission (NDRC). So while the “market-openers” cry foul and attempt to overhaul existing EU legislation, the “cash-strapped deal-seekers” do not see it in their interest to comply with any policy to change the status quo.

To argue that China actively seeks to weaken the EU by reaching agreements with individual member states to create a divisive “China lobby” within the union may be a stretch. China has little to gain from the dissolution of the EU. Nonetheless, Europe must put its economic house in order, encourage China to open up its market to foreign firms, and finally mitigate the unfair advantages that Chinese firms have while bidding in Europe. To achieve the first goal, the EU must evolve beyond its original intent and become a monetary and a fiscal union. Though this would most likely face serious resistance from many EU states, the debt crisis in Europe today is a direct result of a failure on the part of the EU states to coordinate fiscal policy. It is important to remember while China demands certain conditions for its purchase of euro bonds, this originated from a lack of European coordination that precipitated this disaster. By allowing each state to pursue its own interest independently, each state ended up collectively worse off than if they had coordinated their policies together. Moving towards a fiscal union will benefit the EU in the present by giving investors confidence in EU bonds, and will benefit the EU in the future by making it easier to head off the type of debt crises that we see today, reducing the need for the type of outside intervention that Europe is soliciting from China now.

In addition, more regulation will be required to prevent foreign firms from using subsidies to gain unfair advantages in bidding. Since there already exist a myriad of regulation in China, the European Financial Stability Fund suggests that the EU should reciprocate, especially in fields such as defense, critical technologies, media, and education.

While Chinese investments have exposed weaknesses in the EU’s structure, these are all manageable issues that, in time, can be resolved. Although the alarmist reports in the media have painted a portrait of newly ascendant China righting past wrongs by reverse-colonizing Europe, the truth is that China is neither belligerent nor friendly – it is simply in pursuit of its own self-interest, and Europe should respond accordingly by strengthening existing ties between states.

Since its founding in 1923, the Turkish Republic has largely aligned itself with the West. A NATO member since 1952, the nation served as a lynchpin in American Cold War and Middle East policy. Turkey still provides essential logistical support to American forces in the Afghan and Iraq Wars by allowing American aid and cargo to pass through the country.

Recent developments, however, indicate that the country’s foreign policy has begun to shift away from the West as Turkey strengthens its relationships with rogue regimes, such as Syria and Iran. While there are many reasons for this realignment, one of the most pressing has been the lethargic pace of talks regarding Turkish accession into the European Union (EU). To counter these trends, European leaders need American backing in re-engaging Turkey and offering incentives to remain allied with the West, for a Turkish realignment would detrimentally affect the dynamics of the region.

The unsustainable status quo between Turkey and the EU could drive Turkey away from the American-European alliance. Although initially promising, the Turkish bid for full EU membership has become mired in controversy. The Union’s two most powerful members, France and Germany, have expressed reservations over full Turkish membership, fearing a flood of impoverished workers into Europe from Turkey. The Turkish occupation of Cyprus, in addition, places Turkey in conflict with several other EU members, including Greece. In fact, the conflict over Cyprus has already stalled negotiations on several of the 35 chapters that Turkey and EU states must agree upon before accession.

Public support for the EU in Turkey is also highly volatile and closely tracks domestic developments. Commitment to joining the EU has waned under the currently ruling Justice and Development Party (AKP), and other foreign policy interests, those in the Middle East, have taken priority. Before negotiations completely collapse, both Turkey and the West must agree to change course.

The EU agreement, however, may be difficult. The Turkish have compromised on policies to appease the European Union, but some of these “reforms” have allowed AKP to consolidate its power over the government. For instance, while recently-passed constitutional amendments bar gender discrimination, AKP also pressed through a judicial reorganization that expands the size of the nation’s highest constitutional court — allowing the government to pack the courts with pro-AKP judges. As the courts have represented AKP’s main opposition (the constitutional court considered banning the party several years ago), AKP has cemented its power in the country. Unchecked, the government is free to depart from Turkey’s traditional foreign policy goals, drawing the nation ever closer to Syria and Iran.

If ties do not strengthen, Turkey’s increasing engagement with rogue regimes will damage American, European, and Israeli interests. A harbinger of the potential consequences of this shift can be seen in the recent Gaza flotilla incident. Historically, Turkey has maintained peaceful and relatively cooperative relations with Israel. The nations, in fact, have provided each other mutual assistance in the past: Israel has supplied arms to the Turkish military, the two countries have engaged in joint military exercises, and Turkey helped mediate Israeli-Syrian peace talks in 2008.

In the aftermath of the flotilla incident, however, relations have sunk to an historic low. Investigations have found that one of the boats was purchased with the assistance of the AKP-controlled Istanbul municipality, and AKP Turkish Prime Minister, RecepTayyipErdoğan, has been increasingly critical of Israeli Prime Minister Benjamin Netanyahu’s government. Turkey also canceled Israel’s participation in new multinational military exercises due to concerns that Israel might be training for a strike against Iran.

On the other hand, Turkish-Iranian relations seem stronger than ever. By means of its nonpermanent seat on the UN Security Council, Turkey has attempted to undercut U.S. efforts to impose sanctions on Iran, weakening the international response to the Iranian nuclear program. The recently scuttled Turkish-Brazilian deal that would have allowed Iran to obtain enriched uranium in return for some of its less refined nuclear material would have legitimized Iran’s drive for nuclear weapons as well as further damaged American and European efforts to halt Iranian nuclear armament. Such a drastic shift in Turkish foreign policy underpins the nation’s increasing sense of estrangement with Europe and the West, with potentially devastating consequences.

A Turkish realignment would also affect American interests in the Middle East. NATO’s Incirlik Air Base in Southeast Turkey is a strategic regional location. U.S. forces have used this asset to supply American troops in Iraq and Afghanistan. In addition, the base also served as a staging ground for the evacuations of Americans during the Israel-Hezbollah War of 2006.  In recent years, however, Turkey has increased restrictions on use of the base, for example denying American forces transit through the base during the 2003 invasion of Iraq. Turkey’s continued alignment with Syria or Iran is expected to make such restrictions more common, depriving the U.S. of a necessary tool to supply forces in the Middle East and project U.S. power in the region.

A further cause for concern for the United States and Europe is Turkey’s strengthening relationship with China. Recently, the two nations performed joint air force maneuvers, worrying NATO members that China might gain access to their military strategies. In October, both nations announced a new bilateral partnership that would triple trade by 2015 and double it again by 2020. As China has been reluctant to support American policies in North Korea and the Middle East, Turkey might soon become a less helpful ally to the United States in the region if it increasingly cooperates with Beijing.

But how can the United States and Europe forestall a Turkish shift? One of the first, and by far the easiest, steps that the EU could take is to suspend accession talks. These negotiations have simply raised tensions among EU members and provided AKP political pretext to attack the secular Turkish military and judiciary under the guise of constitutional reforms. However, in economics and finance, both groups share common interests. The EU has effectively integrated the European continent—and Turkey’s four largest trading partners are in the EU.

Creating a broader customs or tariff union (only a limited agreement between the two groups has existed since 1996) with Turkey would be an effective foreign policy tool and open new markets in the region. Indeed, as Europe seeks to reduce its dependence on Russian natural gas resources, Turkey provides an effective route for a pipeline to the Caucasus nations. Such economic developments, importantly, will stabilize the country’s foreign policy,  providing the Turkish government an incentive to join in isolating rogue regimes, such as Iran and Syria, which threaten the economic interests of the U.S., Europe, and Israel.

Turkey has always been caught between the East and the West. Its role as a bridge between the two regions has and will continue to grant the nation importance in international relations. It is essential, then, that Turkey remains a firm Western ally. For the nation’s interests to remain aligned with those of the U.S., Europe, and Israel, efforts must be made to further integrate Turkey into the European and Western community. Economic engagement and coordination represent an essential first step to promoting Turkish welfare and protecting Western interests in the Middle East.

With the US facing significant economic challenges of its own, it is easy for it to overlook the impact of the so-called “Great Recession” on the rest of the world. In today’s interconnected marketplace, however, economic problems in foreign countries can have major political ramifications for the rest of the world. Just as the Great Depression contributed to the rise of authoritarian regimes in Europe, today’s economic downturn could lead to the destruction of the American-led liberal order if the negative repercussions of the crisis cannot be contained.

One of the most prominent trouble spots in the global economy is Greece. The government’s massive and rapidly expanding debt burden has raised concerns that the nation might be forced to declare bankruptcy. In light of this danger, the US ought to take action to resolve Europe’s internal dilemma. It should push for measures to contain the crisis while preventing similar situations from arising elsewhere.

Greece’s default would be disastrous for the United States. It would threaten to reverse the nascent global economic recovery and work to destabilize the European Union. If Greece defaults on its loans, investors will likely lose confidence in other European countries with high debt ratios, raising borrowing rates to prohibitive levels. This would create a vicious cycle in which those countries would then find it much more difficult to finance debt, which could possibly trigger further default. Unfortunately, numerous obstacles exist to a potential EU-orchestrated bailout. There are legal and practical questions to deal with, as well as political considerations. Already, public officials in other EU nations, most notably Germany, have publicly voiced skepticism about whether to intervene in Greece, citing the high costs associated with such a step.

After several agonizing months of uncertainty, it seems as though most countries have emerged from the depths of the economic collapse that ensued following the 2008 financial panic. US GDP expanded by 5.7 percent in the third quarter of 2009, while Europe has witnessed slowing rates of decline, and in some cases, including Great Britain and France, even modest growth. The response undertaken during the crisis by Western leaders, most notably US President Barack Obama and UK Prime Minister Gordon Brown, was extraordinary, combining bank bailouts with expansionary fiscal and monetary policies.

While these remedies appear to have succeeded to a degree, they came at an enormous cost; both the United States and Great Britain now face budget deficits in excess of 10 percent of GDP. If the economy enters what experts have dubbed a “double-dip” recession, in which the initial recovery is followed by a second downturn, it is unlikely that governments will be able to intervene on the same scale as they did during the initial phase of the crisis, owing to insufficient resources and public hostility. The US spent $800 billion on last year’s economic stimulus package while the Federal Reserve drove interest rates to record lows. Incurring more debt through, for example, another stimulus package would further risk the long-term financial stability of the United States. Thus, it is imperative that the United States and its allies maintain the current fragile, uneven recovery, or they will be doomed to suffer a protracted period of economic underperformance similar to Japan’s “Lost Decade.”

With so much depending on the revival of Western economies, any potential obstacle to the achievement of that goal must be removed. Greek insolvency would not only bring its own economy to a grinding halt, but could also have a domino effect. Many other members of the European Union, including Spain, Portugal, Italy, and Ireland, are also coping with excessive debt levels incurred by rampant spending over the past decade and sharp drops in revenue owing to the recession. In spite of EU rules requiring that budget deficits not exceed 3 percent of GDP, the lack of any effective enforcement mechanism, combined with “creative accounting,” has allowed profligacy to go unpunished. Already, confidence in the Euro has plummeted, causing its relative value to drop. Concern about the future of the common market could lead Eastern European nations, such Estonia, Latvia, and Lithuania, to rethink their planned entry into the Euro Zone, while strengthening the appeal of “Euroskepticism.” Critics of the Euro have long argued that a monetary union would lead to this kind of a crisis; now, their warnings appear to be vindicated.

A weakened EU is not an outcome that would be favorable for the United States. Although American and European politicians have their differences on some issues, a strong, unified Europe is in the United States’ best interest. As the US combats the complex and pressing questions of international terrorism, nuclear proliferation, human rights abuses, trade negotiations, Third World poverty, and environmental degradation, it is important to have a partner capable of assisting in its effort to provide global leadership. A weak and divided Europe cannot fulfill this role if it is plagued by economic disunity and decline.

To this end, the United States ought to play an active part in preventing Greek default. It should lean heavily on France and Germany, the EU’s economic powerhouses, to orchestrate a bailout that includes strict austerity conditions, cutting spending and raising interest rates, along the lines of International Monetary Fund standards. A major US diplomatic campaign, with the active involvement of President Obama, can display the vitality of this issue. Greece needs more than a band-aid solution; it needs a complete overhaul of its economic system. For years, Greece has run deficits well above EU limits. Rampant corruption and wasteful spending have brought the country to its current juncture. Even today, in the midst of the crisis, intransigent public sector unions have organized street protests in Athens and elsewhere, demanding immunity from the severe repercussions of fiscal austerity.

Critics contend that past interventions that imposed austerity have had disastrous consequences. While this did occur in the short term in some cases, such as the Asian economic crisis of 1998, in the long run, budgetary restraint is the only way to set countries on the path toward sustainable growth, as opposed to a temporary expansion followed by yet another crisis. Countries such as Thailand, Indonesia, and South Korea, all of which accepted IMF loans in the late 1990s, rooted out corporate mismanagement and other practices that inhibited productivity, and the result was protracted economic expansion over the course of the past decade.

Like the countries of East Asia, Greece cannot be given a bailout without strings attached because it will create a problem of moral hazard, allowing Spain, Italy, and Portugal to continue their prodigal ways in hopes that they too will be protected. Instead, they should be following the example of Ireland, which in recent months has introduced tough reforms designed to control its budget deficit, including sharp pay cuts for civil servants. Although controversial, these measures have been largely accepted by the Irish public, as they acknowledge that the short-term pain of austerity is preferable to continued financial turmoil. Hopefully Greece will demonstrate a comparable degree of responsibility in dealing with its dire financial situation.

US involvement is crucial to ensuring that a rescue package is formulated and organized according to the principles of austerity. France and Germany are hesitant to offer assistance, but could be persuaded if the United States emphasizes the importance of the Greek situation to the global recovery and the perils of allowing the crisis to spread. Such an approach will reap vast rewards for the US and its allies in the form of increased economic growth and greater geopolitical stability. For these reasons, President Obama ought to make securing aid for Greece a top priority.

On November 3, 2009, the European Union’s Lisbon treaty was at last ratified when the Czech president Vaclav Klaus ended his solitary opposition and signed the pivotal — if contentious—document, eight years in the making. Despite its roots in the 2001 Laeken Declaration’s pledge of a “more democratic, transparent, and effective” Europe, the Lisbon treaty’s passage is marked by some noticeably undemocratic qualities. Dating to its former incarnation as the more federalist “constitutional treaty,” which contained such proto-nationalistic elements as an EU anthem and a European “bill of rights,” the much-maligned Lisbon treaty was “agreed upon,” despite being rejected by three out of six referendums. Moreover, 10 governments backed down from their own promises of public votes. For the most part, this contention can be dissected as the struggle between the maximalist and minimalist factions of the EU: between those who argue for a more integrated Europe and those who are content with the current supremacy of certain member-states.

In light of the relatively small fanfare generated by the treaty’s final adoption, questions remain as to whether Lisbon will effect any palpable change and what it means for Europe’s future on the world stage. The Lisbon treaty aims at further European integration and can be taken as a political statement in support of a more interconnected Europe. For all the substantial political capital used to ensure the treaty’s passage, however, the maximalists have nevertheless won an empty victory. Consider current European Commission President José Manuel Barroso’s statement about the opportunity presented by the treaty: “Don’t expect miracles. Lisbon reinforces our capacity to act, but at least as important is our willingness to act.” Nothing better illustrates how politicized and inertial the current state of affairs has become than the highly conservative picks of Herman Van Rompuy, then Belgian Prime Minister, and Catherine Ashton, previously European Commissioner for Trade, to the new posts of European Council President and high representative of foreign policy.

In one view, this “capacity to act” was strengthened by the treaty’s “streamlining” and “simplification” of EU decision-making. In the past, one of the European Union’s main challenges had been its chronic inability to produce a foreign policy consensus among its 27 member states. In the vacuum of any overarching focus, its foreign policy conformed to the whims of specific members. The treaty’s creation of an EU president and foreign policy representative purports to address this problem. Furthermore, the use of frequently paralyzing unanimous votes has been abandoned in favor of majority rule in many policy areas, including migration, criminal justice, and judicial-police joint action. Additionally, Lisbon changes the voting mechanism in some zones to assign votes to member states based on their populations.

In contrast, some critics rightfully question the potentially troublesome sweeping powers of “co-decision” awarded to the still-unfamiliar European Parliament. These include approval of European Commission president and ministers along with partial oversight of the EU budget. The European Parliament now wields influence that is, theoretically, almost equal to the European Council. Many see this as a disaster, pointing to the fact that Members of the European Parliament (MEPs) are out of touch with their constituencies. Relatively few Europeans vote for MEPs, and, as a recent article in The Economist noted, many Europeans do not even know who represents them. From farm subsidies to immigration, some fear that the Parliament will initiate an ill-advised legislative voting spree on narrow democratic mandates. An already prickly co-existence between the European Council and the Brussels-based European Commission will now be tested by the accommodation of another, even more unaccountable body.

Despite supposed policy improvements, no guiding European foreign policy exists. With the lackluster appointments of Belgium’s Van Rompuy and Britain’s Lady Ashton, EU leaders have confirmed that they are content to exert influence only within Europe, rather than on the world stage. The EU has missed a unique opportunity to utilize the Lisbon treaty to redefine a global Europe, which was—in theory—its most significant aim. Business continues as usual, with balance-of-power concerns and the prioritization of national interests leaving the EU with only a secondary role in world affairs. Granted, Mr. Van Rompuy is an avid Atlanticist, but as he has been prime minister of Belgium for less than a year, it is doubtful that he will “turn heads” in Washington, Beijing, or Moscow the way that a more prominent figure like Tony Blair could have. As British Tory leader David Cameron has observed, Van Rompuy is not “president of Europe.” He is a narrower, “chairmanic” figure rather than a promising sign of unified European diplomacy. It was Van Rompuy’s modest stature that garnered him the outsized support of Germany and France.

Lady Ashton was chosen for similarly dull reasons. When asked why she was selected, French president Nicolas Sarkozy replied, “It was felt a woman should hold a big EU job, because a center-left politician was needed to ‘balance’ Mr. Van Rompuy and because ‘our British friends’ wanted the post.” In fact, Lady Ashton was, at best, only the third choice of her own government. To be fair, Mr. Van Rompuy and Lady Ashton had both performed admirably in their previous roles. But this was neither the time nor the place to pick two relatively inexperienced political unknowns for the most public of EU positions, a weak start for a “new” Europe.

Some Euro-conservatives argue that a minimalist interpretation of the Lisbon treaty will actually benefit Europe. They would also argue against appointing a celbrity figure as either president or foreign minister because neither position is directly elected. As Financial Times columnist Gideon Rachman notes, “Ordinary Europeans would be justified in asking by what right the unelected Mr. Blair [for instance] speaks for them.” Yet Mr. Rachman also observes that European unity tends to crumble at moments of international crisis, indicating the necessity of Lisbon’s integrative measures. In principle, the treaty’s main objective was to endow Europe with the political heft to match its status as the world’s largest economy. In all likelihood, it is hard to envision America and China, or even India and Brazil, really respecting Mr. Van Rompuy and Lady Ashton. It is even less likely to imagine Russian Prime Minister Vladimir Putin doing so. During the South Ossetian War, Mr. Putin reserved no respect for even the European Union itself; its lack of a collective security or defense policy made it impossible for Europe to enforce its demands that Russian troops withdraw. In an international political landscape shaped by power interests, Europe needs the fullest potential of the Lisbon treaty to avoid becoming an international afterthought. Instead, this missed opportunity will cement the status quo of EU foreign policy being diluted by national governments. As Henry Kissinger once famously—if anecdotally—observed, “Whom do you call when you want to talk to Europe?”

While Europe searches for its voice, it will remain a spectator in a G2 world molded by America and China, as enunciated by British foreign secretary David Miliband. Admittedly, the European Union has been considered a triumph of diplomacy, having stabilized the Continent and made war unimaginable. In one sense, though, the European project’s success has led to the present difficulty of deciding how to project its considerable political-economic weight abroad. Europe, with the exhaustion following the Lisbon treaty and the lack of future direction it provided, will only gain international respect if it can harness the treaty’s potential and work toward a more maximalist EU.