Consider the paralysis of the Doha Round of WTO trade negotiations. Too many countries have too many incompatible red lines for negotiators to find common ground. The quest for a global carbon treaty has fallen afoul of the same forces. The continuing differences between China and Russia on the one hand and Britain, France and the U.S. condemn the United Nations Security Council to slow and irresolute movement.
The inherent problems of multinational institutions show up on a smaller scale as well. The EU response to the financial crisis has been consistent: to show up a day late and a dollar short. It is easy to blame these failures on European leaders. French President Nicolas Sarkozy is too flashy and unfocused, German Chancellor Angela Merkel too plodding and unsure, Italy's Prime Minister Silvio Berlusconi too, well, Berlusconi.
In reality, the causes of failure run deeper. Spooked financial markets move at a pace that the grinding intergovernmental processes of consultation and haggling cannot match. For Europe to act, as many as 27 governments must each determine their own policy stands, and then take those views to the European level where further haggling and compromise must take place. Then there is the European Central Bank to consider.
With so many parties and constituencies, decisions suffer from two fatal flaws: They are too slow and too mushy. Before Europe makes up its minds, the markets have moved on to the next crisis. Thanks to the EU's complicated bureaucratic governance, Europe has been an ineffective spectator during the greatest crisis in its history.
The European Central Bank is currently the only institution that can act on the time scale that volatile markets require. But it is less a multinational institution than a central bank in search of a state.
Europe has only two real alternatives. The first is that the EU (or at least its eurozone core) can transform itself into a single national state. France, Germany, Italy, Spain would become much more like Texas, California and New York: big states in a larger federal union.
A single European government would make the big decisions and local authorities would deal with the small stuff. Instead of international institutions together making up the European Union, we would have a United States of Europe.
The second (and marginally more likely course in my judgment) is to settle for a less perfect union. The single euro will break up into a larger number of currencies, and the European Union will become a weaker and less cohesive body of more independent member states-more British Commonwealth than Roman Empire.
Either course means the death of Europe's much-vaunted middle way: a society of sovereign states that accept the jurisdiction of international institutions. And if this model doesn't work in Europe anymore, the chances that it can work globally are vanishingly small.
The postwar world is dead. The international institutions that flourished after 1945 must now adapt or die.
