The European Union began decades ago as a small organization for economic cooperation. Over time it expanded to 27 states and took on significant political roles. In 2004 leading Eurocrats drafted a constitution to turn the still loose federation into something closer to a continental nation state. Most notable was the shift of responsibilities, or "competencies," from member governments to Brussels, reduced national vetoes over EU decisions, appointment of a High Representative for Foreign Affairs, creation of a European foreign service, and appointment of a permanent President of the European Council.

But the European establishment pushed one agreement too far. Voters in France and the Netherlands said no, killing the accord. The lesson was clear. Former French President Valery Giscard d'Estaing opined: "Above all, it is to avoid having referendums." The European governments moved a few commas and made the document even more abstruse, before reissuing it as a treaty that only required parliamentary approval.

But Ireland's constitution mandated a referendum and last June the Irish shocked the Eurocrats by voting no. One British Labor MP called the Irish "extremely arrogant." German Interior Minister Wolfgang Schaeuble complained that "a few million Irish cannot decide on behalf of 495 million Europeans," preferring instead that a few thousand Euroelites do the deciding.

After briefly toying with the idea of either kicking out the recalcitrant Celts or confining Ireland to secondary status, the EU establishment insisted that Ireland vote again. The treaty passed the second time in October, primarily due to economic scare-mongering. Judith Crosbie wrote in European Voice: "the vote largely reflected concerns about the Irish economy, with most voters saying 'Yes' to staying close to where the money it," even though Lisbon actually offered no economic benefits.

Then the treaty was held up by Czech President Vaclav Klaus, who refused to sign his nation's ratification. This sparked more than the usual petulance from other European leaders, including demands for his impeachment. In early November Klaus acquiesced, allowing the Eurocrats to get down to important business: divvying up the political spoils.

In theory, Lisbon was about more important issues. Irish Sen. Deirdre de Burca argued: "If I had to name just one compelling reason to support the Lisbon Treaty, however, it is because the treaty will enhance the capacity of the EU to become a more effective actor at an international level." Similarly, claimed Wilfried Martens, a leading Member of the European Parliament, "the EU must be united and able to speak with one voice on the world stage."

Europeans were acutely aware that the continent is still seen as largely as an economic entity. Charles Grant, director of the Centre for European Reform, complained: "On many of the world's big security problems, the EU is close to irrelevant. Talk to Russian, Chinese or Indian policy-makers about the EU, and they are often withering. They view it as a trade bloc that had pretensions to power but has failed to realize them because it is divided and badly organized." Similarly, said President Sarkozy, the treaty was necessary since "Europe cannot be a dwarf in terms of defense and a giant in economic matters."

In short, Lisbon was about Europe, not Europeans. There is no evidence that most Europeans worry much about whether people around the world think of Europe as an equal to the U.S., China, and Russia. But Eurocrats worry about it.

Yet while supposedly hoping to use Lisbon to turn Europe into a Weltmacht, leading Europeans now are engaged in an unseemly squabble over offices. The plotting has grown ever more intense with the approach of Thursday's summit, and scheduled decision on the new president and foreign minister.

Despite Lisbon's many claimed benefits, the treaty has not changed Europe. The EU remains an amalgam of nations rather than a single political community. Since the center-right is ascendant, conservative governments claimed the presidency. But the center-left must be mollified, so its representatives expect the foreign ministry — a prescription for divisive inaction. The Poles are demanding a genuine say in the decision, and perhaps even one of the positions, for the Central and Eastern European states. Times columnist Brownen Maddox observed: "The haggling over Europe's new top jobs resembles that old children's card game of mixing up the heads, bellies and feet of different animals, for a deliberately preposterous result."

There's more, however. Some Eurocrats argue that British officials should not be considered because even if they, most notably former Prime Minister Tony Blair and current Foreign Minister David Miliband, personally are Europhiles, the majority of Britons are Euroskeptics. And Blair, of course, was chummy with U.S. President George W. Bush and supported the Iraq war.

Even stranger, after pushing a treaty to strengthen Europe, some of the governments want to select new officers who won't strengthen Europe. For instance, Denmark, Finland, and Ireland issued a joint statement advocating a "chairman not a chief" for the Council presidency. This means, as the Economist puts it, EU leaders talking "to themselves" rather than "to the world." One reason is rivalry between the European Commission (representing the continent) and the European Council (representing governments). Still, someone more attentive to EU governance might be useful in a petty-bureaucratic sense. George Wittman pointed to the need to "bring some order to a bureaucracy at EU headquarters in Brussels that has mutated and proliferated like a bad case of hives." Alas, as Wittman observed, there are few things at which Europe better excels than bureaucratic growth.

However, a chairman won't enhance Europe's international influence. There's a good argument for not claiming that any one person speaks for 500 million Europeans but, as the Wall Street Journal observed, "this is an argument against the Lisbon Treaty itself." The Eurocrats cheerfully told their publics that Lisbon was necessary to promote EU efficiency while telling each other that Lisbon was necessary to promote EU influence. The elite defenestrated concern over accountability and representativeness long ago.

Having decided that the lack of a European polity didn't matter, it would make sense to choose someone who might help the continent fulfill its potential. As a friend of Tony Blair's observed in making the pitch for the former premier's candidacy, "God knows what the Americans would do if we got [a] Belgian as European president. They already can't be bothered with us most of the time."

Yet after going to the trouble of ramming through a treaty that polls indicate was opposed by popular majorities in half of the EU member states, EU leaders apparently plan to reject the most impressive candidates for the top jobs. Blair was the early favorite for president, but has faded. The field is dominated by a gaggle of colorless national politicians.

Current candidates include Belgium's Herman Van Rompuy, Denmark's Jan Peter Balkenende, Ireland's Mary Robinson, Latvia's Vaira Vike-Freiberga, Luxembourg's Jean-Claude Juncker, and Sweden's Fredrik Reinfeldt. All of these people are respectable and accomplished in various ways — Van Rompuy is noted for his haiku writing, for instance — but none will "stop the traffic" in foreign capitals, as Miliband put it. The lack of international gravitas doesn't mean President Barack Obama won't ever call, but he will phone the British prime minister, French president, German chancellor, and perhaps the leaders of Italy, Poland, and Spain first.

Blair could still reemerge in the EU's "time-honored fashion… the cosy back-room stich-up," in the words of the Times of London. One Eastern European diplomat complained: "Trying to work out who is going to be President of the EU Council is not dissimilar to decoding who was in or out in the Kremlin in the 1970s. It seems strange to many of us that 20 years after the fall of the Berlin Wall we have to dust off our Kremlinology skills here in Brussels."

However, even choosing Tony Blair or a similar figure likely wouldn't matter much to the EU. As the British think tank Open Europe observed: "the idea for a President is mostly about giving the EU a symbolic, political figurehead to help propel its wild dreams about becoming a world superpower." The so-called European Project remains far from completion.

Europe remains deeply divided over international issues, and those differences won't disappear through attempts by another official, even one as charming and talented as Blair, in Brussels to plaster over the cracks. Nor is adding a foreign minister — here, too, there are favorites and underdogs in a constantly changing race — and diplomatic corps enough to create a united foreign policy.

Moreover, as French Foreign Minister Bernard Kouchner observed: "We must bear in mind, the necessity of supporting our diplomatic efforts with a common defense, a European defense…. Without this European defense our diplomacy lacks strength." Yet no one in Europe is interested in spending more on the military, creating forces which are combat capable, or deploying troops in harm's way. Even Great Britain is likely to retrench militarily in the face of a deep and prolonged recession.

Most Europeans live meaningful lives without great concern over how their continent is viewed in Washington or elsewhere. But Europe's political leadership remains burdened by the old Henry Kissinger insult: what's Europe's phone number? The Lisbon Treaty was drafted in part to provide such a phone number.

However, the EU remains a collection of nation states, not a nation state. Despite the forced passage of Lisbon, the differences among EU members remain great. And the addition of a president and foreign minister won't make anyone more willing to die for Brussels. Until Europeans are more loyal to Europe than their home countries, the European project will remain unfinished and unfulfilled. And the Lisbon Treaty will prove to be costly diversion.

So dramatic was the ensuing revolution that it is easy today to forget that communism ever existed -- or at least what it really meant. Decades of totalitarian oppression were swept away in an instant.

What may be the most important liberating moment in human history should give us hope even if we are tempted to despair about the future of our own nation and of Western civilization.

Communism was unmatched in its endless slaughter, killing more than 100 million. It impoverished spiritually as well as economically.

Yet what seems inevitable today was not obviously so in 1989. Liberty had always ended up stillborn in the Soviet empire.

But 1989 proved to be different.

In Poland the communist leadership organized free elections -- which it promptly lost. Hungary tore down its wall with Austria, allowing East Germans to escape their country through Hungary and on to the West. Demonstrations engulfed the so-called German Democratic Republic, forcing the Communist Party to retreat.

On Nov. 9 the regime opened the Wall, never to be closed again. Within a year a regime distinguished mainly by its willingness to shoot desperate people seeking freedom disappeared.

Revolution erupted even in Romania, unseating the monstrous Ceausescus. Eventually even the Soviet Union disappeared.

The collapse of communism remains a fantastic triumph of the human spirit. With minimal bloodshed, average people overthrew a gaggle of tyrannies; the desire for liberty trounced the lust for power.

There were heroes in all of the communist countries. Average people willing to speak out, demonstrate, and demand their rights as human beings.

Some heroes stand out. Alexandr Solzhenitsyn, the Soviet novelist who chronicled the horrors of the gulag. Lech Walesa, the electrician who climbed atop a shipyard wall in Gdansk, Poland, to declare that the time of repression was over. Pope John Paul II, who told his Polish countrymen to fear not.

The playwright Vaclav Havel, who called the Czech regime to account for its crimes. Imre Pozsgay, who broke with his Hungarian Poliburo colleagues to call the 1956 uprising a "popular revolt."

Even more important was Mikhail Gorbachev. He was a reform communist, but he kept the Soviet troops in their barracks, leaving Eastern European apparatchiks to stand alone.

Finally, there was Ronald Reagan. He understood the real nature of communism, that it truly was an "Evil Empire." He also believed that communism could be defeated and tossed into the dustbin of history.

On June 12, 1987, he stood in front of the Brandenburg Gate and said: "Mr. Gorbachev, tear down this wall!" Another 29 months would pass, and Ronald Reagan would leave office, but the Brandenburg Gate did open.

Today it is almost as if the Wall never existed. Only a few small sections remain. The structure continually grew more deadly, yet several thousand people made it over, under, or around the Wall and the border fortifications lining the rest of the border between the two Germanys.

Alas, tens of thousands of East Germans were caught and imprisoned for "Republikflucht" -- attempting to flee the workers paradise. Worse, roughly 1,000 people were murdered attempting to escape their national prison.

The first person to die was 58-year-old Ida Siekmann, who jumped from her building to the bordering road in West Berlin on Aug. 22, 1961. Two days later a 24-year-old tailor, Guenter Litfin, became the first to be shot and killed -- while attempting to swim the River Spree.

On Feb. 6, 1989, 20-year-old Chris Gueffroy was the last East German to be murdered while seeking liberty. He was shot 10 times. On March 8, 32-year-old Winfried Freudenberg, an electrical engineer, became the last person to die in an escape attempt, when his home-made balloon crashed.

The fall of the Wall, and the evil system behind it, deserves to be celebrated. Not just on Nov. 9. But every day.

Two decades later much remains to be done by those who love liberty. Abroad tyranny remains. At home liberty also is threatened, though not as dramatically. The expansive welfare rather than the brutal authoritarian state is on the march.

Yet hope remains. Two decades ago what had only seemed to be a faint dream became a reality. The Berlin Wall fell. Communism disappeared. Hundreds of millions of people became free.

The spirit of liberty remains. Sometimes deeply buried. But the spirit of liberty remains.

In spite of its monumental failure to bring social peace and material abundance, socialism is enjoying something of a renaissance. From Venezuela to Bolivia to South Africa, government ministers espouse the supposed virtues of socialism. Even in the West, some policies are taking government intervention in the economy to levels unseen in decades. Given the renewed interest in alternatives to capitalism, it is perhaps appropriate to recall the last time that socialism was tried with real gusto.

Of course, shops can be filled with goods, roads can be rebuilt, and houses renovated. The psychological scars of communism take much longer to heal. As one traveler to Russia wrote in 1982:

If it is hard to describe the economic wasteland of Russia to someone who hasn't been there, it is even harder to describe what their totalitarian system has done to the human spirit ... It isn't just the drabness and grayness one sees everywhere. Or the rudeness and surliness one encounters so often. It's that you virtually never see people laughing, smiling, or just seeming to enjoy themselves. People seem to walk slightly bent over, their eyes always averting a stranger. There is an overwhelming sense of oppression and depression.

As the Austrian philosopher Friedrich von Hayek explained in his 1944 classic, The Road to Serfdom, central planning leads to massive inefficiencies and long queues outside empty shops. A state of perpetual economic crisis then leads to calls for more planning. But economic planning is inimical to freedom. As there can be no agreement on a single plan in a free society, the centralization of economic decision-making has to be accompanied by centralization of political power in the hands of a small elite. When, in the end, the failure of central planning becomes undeniable, totalitarian regimes tend to silence the dissenters—sometimes through mass murder.

Some 100 million people have died in the pursuit of a communist utopia. Eliminating profit and private property was meant to end social ills, such as inequality, racism, and sexism. But the closer a society got to Marxism—whether it was half-hearted attempt as in Hungary or a whole-hearted attempt as in Cambodia—the bloodier the result. Survival in a communist society necessitated lies, theft, and betrayal. Thus, as the former Czech President Vaclav Havel wrote, most people in the former Soviet bloc grew up without a moral compass. These morally compromised survivors of communism find it difficult to reflect on the past and to come to terms with it.

Unlike the Germans after the World War II, the people in ex-communist countries were never forced to face their demons. As a consequence, communist rule has not acquired the moral opprobrium of Nazism. As long as that remains the case, socialist economics will continue to enjoy an aura of plausibility.

At the same time, there is a remarkable lack of moral concern in the West with the atrocities committed under communist systems, including the tens of millions of people who perished as a result of communist policies. By contrast there has been a great deal of impassioned condemnation of the outrages of Nazism. The most important reason for treating Nazism and communism differently has been the perception that communist crimes were unintended consequences of the pursuit of lofty goals whereas the goals of Nazism themselves were unmitigated evil.

Western intellectuals who had once idealized the Soviet Union have done little soul searching regarding the roots of their beliefs. The long association of idealism with animosity toward commerce and capitalism among Western intellectuals has contributed to a reluctance to criticize a system ostensibly established in opposition to the values they abhorred.

Public attitudes in former communist countries have been conflicted because of the arguable complicity of many citizens in keeping the old system in power. A predominant attitude in Eastern Europe and Russia toward the former communist systems has been a mixture of oblivion, denial, and repression.

Contemporary Western attitudes toward the fall of the Soviet system suggest that political beliefs endure when they are widely shared and can satisfy important emotional needs.

None of this was supposed to happen, of course. During the recent UK debate over banning tobacco displays, the government repeatedly assured parliamentarians that not only would such a ban not increase the already large UK illicit market (HMRC estimates that 26 percent of all cigarettes consumed in the UK are non-duty paid and some 70 percent of seized cigarettes are counterfeit), but it would result in a significant decline in smoking, particularly among young people.

But the evidence from across the Irish Sea shows that both of these claims are simply false.

There are several reasons why banning tobacco displays drives the illicit tobacco market. First, by putting all tobacco products under the counter, a display ban undermines the belief that tobacco is a legal, regulated product and that selling and consuming counterfeit and smuggled tobacco products are crimes. Surveys in Canada have found, for example, that a majority of Canadians who buy illicit cigarettes do not believe that they are committing a crime.

Second, display bans fuel the illicit tobacco market by making it more difficult for customers to distinguish between legal and illegal products, since all tobacco is hidden from view. Third, display bans make it easier for dishonest store keepers to mix illicit and untaxed tobacco products and legitimate taxed cigarettes and thus to pass off illicit products.

Fourth, display bans make it more difficult for enforcement agencies, already overtaxed, to identify illicit tobacco products since all tobacco products are hidden from view. Fifth, through blurring the distinction between above and below the counter products, between legal cigarettes and illegal cigarettes, a display ban makes it more likely that smokers will increasingly get their tobacco from illegal as opposed to the legal and regulated tobacco market.

But banning tobacco displays not only drives the illicit cigarette market; it also does nothing to reduce smoking. To return to Ireland again, a just-released EU survey found that 33 percent of the Irish population smoked, which is the highest rate in the last eleven years. Since 2007, tobacco taxes have increased and tobacco displays banned, but smoking prevalence has increased from 29 percent to 33 percent. Even more alarming is the fact that the largest cohort of smokers is now aged 16-30.

The same lack of effectiveness for draconian smoking measures, such as a public smoking ban, is found in England. The NHS recently released a study, 'Statistics on Smoking', which found that the public smoking ban had not resulted in a statistically significant decline in smoking. Indeed, certain groups, such as young males, are in fact smoking more than before the ban.

Part of the reason for these increases in smoking, particularly in the young, is that many smokers find these heavy-handed measures unacceptable. They are what psychologists call 'reactant', that is, they push back against regulation and assert their freedom through engaging in the very activity that the state is trying to prevent.

Hence, far from preventing smoking, measures like a display ban actually encourage it in those young people already most susceptible to begin smoking.

Therefore, in a UK with a tobacco display ban, we can expect to see not only more smokers, particularly young smokers, but also an enormous increase in illegal, unregulated, and untaxed cigarettes. That's quite the public health 'success'.

The European Union began as a free-trade zone. The economic benefits were obvious while the threats to national sovereignty were few. Over time the EU gained political authority, but national governments remained supreme. However, in 2004 leading European federalists, or Eurocrats, sought to change that by drafting a constitution, later turned into the Lisbon Treaty — thereby avoiding popular referenda on ratification — turning the EU into something closer to a nation state.

It took two tries to get the treaty past the Irish, whose constitution mandated a popular vote. But the Eurocrats' apparent triumph still has fallen short: the Czech constitution requires President Klaus' signature for ratification, which he so far has withheld. Treaty backers fear that delay could prove fatal: if the treaty goes unratified until the next British election, required mid-2010, the anti-Lisbon Conservatives, widely expected to win, could rescind Britain's ratification. Then the entire project would collapse.

What are Lisbon's benefits? The public obviously has its doubts: a majority of citizens in all twenty-seven member countries wanted to vote on the treaty and in half of the states likely would have voted no.

If the treaty spurs Brussels to become anything like Washington's bloated Leviathan the European people will be clear losers. For instance, Stephen Booth, author of a new report for the think tank Open Europe on civil liberties, worries: "How can citizens expect their fundamental rights to liberty and independence from the state to be protected by unaccountable institutions which have a vested interest in creating new laws?"

Federiga Bindi of the Brookings Institution argues that the new system "will enable a more coherent European presence on the international stage."

That is true procedurally: the treaty shifts more responsibilities to the EU from national governments and creates a more centralized governing structure, with a permanent president and foreign minister. However, without a willingness of member states to sacrifice national interests and create meaningful military forces — neither of which is likely — the EU's pretensions of global leadership are likely to remain just that, pretensions.

Still, politicians and bureaucrats like pretensions. Former–British Prime Minister Tony Blair leads a chorus line of aspirants to the EU presidency and chief international spot. Moreover, a bevy of EU parliamentarians and regulators look forward to imposing their will on the 500 million people who live within the EU.

Yet Klaus stands in the way. First he worries about his nation's sovereignty. He recently filed a statement before the Czech constitutional court contending:

Twenty years after the restoration of our democracy and sovereignty, we are once again dealing with the question whether we should — this time voluntarily — give up the position of a sovereign state and hand over decision-making on our own matters to European institutions outside of the democratic control of our own citizens.

Second, as Klaus pointed out in an address to a hostile European Parliament earlier this year: "There is no European demos — and no European nation," which means the EU's growing political authority creates "the democratic deficit, the loss of democratic accountability, the decision-making of the unelected." The Eurocrats' determination to construct a quasi-nation state without popular support risks creating "a situation where the citizens of member countries would live their lives with a resigned feeling that the EU project is not their own."

As long as the Irish decision was in doubt, Klaus withheld his signature. He continues to wait, as seventeen parliamentarians have launched another challenge to Lisbon before the Czech constitutional court, and Klaus has demanded a special EU opt-out from the Charter of Fundamental Rights regarding property claims arising out of the post–World War II expulsion of ethnic Germans and Hungarians from Czechoslovakia, the so-called Benes Decrees.

But the Eurocrats are impatient to grab the fruits of victory. Notes Simon Taylor of European Voice: "Discussions on who should get the EU's new top jobs have been pushed off the agenda of this month's summit by the need to cut a deal with" Klaus. Thus, top European officials have abandoned sweet reason in attempting to force Klaus' assent. The memorable image suggested by the London-based think tank Open Europe is "of a Klaus-shaped figure being bundled into the back of a car with blacked out windows." In this way, the Eurocrats have inadvertently demonstrated the truth of Klaus' critique.

Nicolas Sarkozy, for one, said that delay "won't be without consequence." Czech officials report that he also threatened their nation with expulsion from the EU. German officials were equally blunt, urging the Czechs to oust Klaus. German Member of the European Parliament (MEP) Jo Leinen called for Klaus' impeachment. Such threats have not been well-received: Germany's past interventions in Czech life are not remembered fondly.

Only slightly less obnoxious was the suggestion by the president of the European Commission, Jose Manuel Barroso — recently rewarded for five years of unimpressive service with another term — to strip the Czech Republic of its EU commissioner. He stated: "If there is no Lisbon Treaty, there is no guarantee for the Czech Republic to have a commissioner." This is a repeat of the threat made against Ireland after the Irish people voted down Lisbon last year. Yet this would be a curious way to reward the Czech government, which ratified the treaty. Moreover, notes British MEP Daniel Hannon: "Commissioners are lobbyists for the EU in their home states, not the other way round. So why should losing a Commissioner matter to anyone except him and his family?"

Other Lisbon supporters have suggested slightly less coercive measures, such as changing the Czech constitution to eliminate the requirement of a presidential signature. However, the issue could prove politically toxic with Czech elections looming next year. The controversial Klaus is supported by two-thirds or more of the population. Indeed, former Prime Minister Mirek Topolanek's support for Lisbon may cost him control of the Civic Democratic Party (or ODS), the former ruling party created by Klaus after the collapse of communism.

Thus, Lisbon remains in limbo. Writes Roger Boyes in the Times of London: "The usual sweeteners that form part of the Brussels diplomatic armory are not helping. Nor does shouting down the phone." Klaus seems unconcerned about foreign threats and domestic pressure alike.

The British Tories have urged Klaus to stand firm until the middle of next year, when an election must be held and is likely to return them to power. And he recently was overheard telling one supporter "Don't worry, I won't" when urged not to sign the treaty.

But the Czech constitutional court might rule as early as early as next week. Moreover, Klaus recently spoke positively of an opt-out proposal advanced by Sweden, which holds the EU presidency. The requisite guarantee could be forthcoming as early as the EU summit this weekend.

He appears to have rejected delay for the sake of delay, opining that he won't wait until a British election next year. He explained: "I do not consider the Lisbon Treaty to be a good thing in Europe — for freedom in Europe and for the Czech Republic. However, the train carrying the treaty is going too fast and has gone so far that it will not be possible to stop it or to send it back."

Still, the Eurocrats may be celebrating prematurely. The train track is not yet clear.

Slovakia, formerly united with the Czech Republic in a single nation, has requested a similar opt-out, and is threatening not to approve a Czech guarantee without one. On Monday, Hungarian Foreign Minister Peter Balazs announced that his government would not approve any Czech provision which mentions the Benes Decrees, since Hungarians were among the victims. Hungary and Slovakia might just be blustering, but maybe not.

Does Lisbon matter to Washington? The U.S. government's best position is no position: the issue is up to the Europeans.

However, Lisbon does matter to Americans. More intrusive internal EU controls are likely to inhibit rather than spur European innovation and growth. A stronger Europe could take on additional international responsibilities including, most importantly, the continent's defense. But national policy differences remain and there is no popular support for any kind of military buildup.

Moreover, the Lisbon Treaty undercuts the principle of democratic governance. Notes my Cato Institute colleague Marian Tupy: "the EU itself has entered a post-democratic age. Increasingly, it is run by unelected and unaccountable technocrats in Brussels who are disdainful of public opinion." For politicians to conspire to impose a major transformation of government, whatever its merits, upon a skeptical public is problematic in any democratic society. In this way the Lisbon Treaty could undermine the popular legitimacy of the EU itself.

The Lisbon train has nearly arrived. But a determined Vaclav Klaus might still find a way to derail the big government express. And thus save representative government in Europe.

In democratic Capitalism, said Karl Marx, the rich became richer and the poor poorer. Marxism inspired young idealists for over a century. Lenin's revolution in Russia in 1917 was hailed as a new dawn. Stalin's invasions brought Communism to Eastern Europe. Communist governments there pledged to create a paradise for workers, who would be freed from exploitative Capitalists and instead work for the state, which would give them full employment and welfare.

Czech author Milan Kundera says of the Communists, "They had a grandiose plan, a plan for a brand new world in which everyone would find his place: the creation of an idyll of justice for all. People have always aspired to an idyll, a garden where nightingales sing, a realm of harmony where the world does not rise up as a stranger against man, nor man against other men."

Problem: this supposed paradise was imposed at gun-point. Nevertheless leftists cheered, dismissing objectors as Capitalist elitists. These elitists would deservedly be decimated, but the masses would get equality and fabulous benefits in paradise.

Alas, this equality was a sham: equality is not possible between those imposing the rules and those imposed upon. Eastern Europeans found that the supposed paradise was actually a cage in which they were fed and watered, but denied basic freedoms to speak, act or move. Masses of youngsters began emigrating from the Communist paradises to the supposed hell-holes of the West.

Migration was easiest from East Germany to West Germany. Official migration touched 197,000 in 1950, 165,000 in 1951, 182,000 in 1952 and 331,000 in 1953. It was impossible to pretend that all these youngsters were just greedy Capitalist reactionaries.

So, Communist countries closed their borders and jailed those seeking to escape. Kundera says the Communist paradise was supposed to be a place "where every man is a note in a magnificent Bach fugue; but anyone who refuses his note is a mere black dot, useless and meaningless, easily caught and squashed between the fingers like a fly. Since by (Communist) definition an idyll is one world for all, the people who wished to emigrate were implicitly denying its validity. So, instead of going abroad they were put behind bars." Escape from paradise was forbidden: it might lead to the unthinkable notion that Communism was not paradise after all.

The Communist dilemma was worst in Berlin city, divided between a Communist east and democratic west. Escape was easiest and most massive here. So, in 1961 the Communists built the Berlin Wall through the entire Berlin border. Unlike most security walls, this did not aim to keep outsiders out: it aimed to keep citizens caged within. Nevertheless, thousands of East Berliners sought to cross, and hundreds were gunned down.

The Brezhnev Doctrine of the Soviet Union held that once a country became Communist, Soviet arms would keep it Communist. Soviet tanks crushed uprisings in Hungary in 1956 and Czechoslovakia in 1968. The same doctrine took Soviet tanks into Afghanistan in 1979. But they suffered a humiliating debacle. When Gorbachev became Soviet president, he withdrew from Afghanistan, ending the Brezhnev Doctrine. In 1989, he told Communist rulers in Eastern Europe that they could no longer depend on Soviet tanks to thwart popular uprisings. Within three months, popular uprisings ousted Communist regimes right through Eastern Europe.

In August 1989, Hungary dismantled border barriers with Austria. Within days, hordes of Eastern Europeans, including 13,000 East Germans, escaped into Austria. Mass demonstrations against Communist rule erupted across Eastern Europe. To soothe public anger, the Communists opened the gates of the Berlin Wall on November 9. Within days, Berliners had chipped away and broken the Wall, amidst delirious cheering. Soon after, the Communist government fell.

Communists and socialists everywhere, including in India, were dismayed. They could not understand why East Germans blessed with income equality, free social welfare and full employment should flee to the highly unequal West, which bristled with unemployment and social perils. An answer came in a letter to a newspaper editor.

"My daughter's hamster (a pet white mouse) has food, water, shelter and even medical care, and a cage full of fun curly tubes. The hamster responds by constantly trying to chew his way to freedom. I think we all understand what freedom is, and it is not a gilded cage."

In recent weeks, Czech President Vaclav Klaus has received a great deal of criticism from both domestic and foreign opponents for his continued refusal to sign the Lisbon Treaty on European integration. Much of this criticism took the form of ad hominem attacks portraying the president as an eccentric provocateur, selfishly seeking media attention for his "extremist" views. (In fact, 65 percent of Czechs agree with him.) Virtually none of his opponents have actually bothered to engage the president on the substance of his arguments.

That is, alas, typical. Proponents of closer European integration seldom acknowledge criticism of their project, let alone address its problems. Take, for example, waste and corruption in Brussels. The European Court of Auditors has refused to certify the EU budget for 14 years in a row. Yet no visible action has been taken to make EU accounting more transparent. If the European Union were a corporation, its top management would have been jailed long time ago.

Or consider the state of democracy in Europe. Klaus is hardly the only one to argue that Brussels is increasingly unaccountable and unanswerable to anyone. In its June judgment on the Lisbon Treaty, for example, Germany's Federal Constitutional Court criticized the European Union's democratic deficit. The court warned that the Lisbon Treaty failed to fill the gap between the growing powers of the European Union and its undemocratic internal decision-making and appointment procedures.

The European Union started off as a simple free trade area, but today it increasingly resembles a nation-state with its own flag, anthem, currency, and, if the Lisbon Treaty comes into force, its own president and diplomatic service. Yet, remarkably, this amalgamation of 27 cultures, polities, economies, and histories into one superstate ruled by an unelected technocracy in Brussels is proceeding apace regardless of public opinion. Thus, when the Dutch, French, and Irish refused further integration in referendums, they were simply ignored.

Indeed, the cause of an "ever closer union" excites almost religious passions among EU enthusiasts. To be against the EU project is portrayed as not simply wrong, but evil. Opponents of integration are often dismissed as nationalists or xenophobes. In fact, it is the lack of open discussion about the European Union that pushes some people whose voices are consistently ignored to the extremes of the political spectrum. It is no coincidence that the increasing power of the European Union has been accompanied by increasing polarization in the European Parliament — the only EU body that reflects the preferences of European electorates.

Some genuinely, though mistakenly, think that the European Union is the best defense against resurgent ultranationalism. Take, for example, European Commission Vice President Margot Wallstrom. During a 2005 visit to a former concentration camp in the Czech city of Terezin, Wallstrom linked the rejection of the EU constitution to the return of the Holocaust. She said, "[Opponents of the constitution] want the European Union to go back to the old purely intergovernmental way of doing things. I say those people should come to Terezin and see where that old road leads."

It is insane to think that by protecting the right of the Czech people to be the masters of their fate, Klaus and others like him want to relive the trauma of Nazi occupation.

Other EU enthusiasts might be the victims of highly biased reporting about goings-on in Brussels. A recent report from the Swedish think tank Timbro has accused the European Union of running a "propaganda machine" that "actively advocates more European integration and prevents free debate on the future of Europe" — all at taxpayer expense. According to the report, the European Union spends "at least €2.4 billion [$3.6 billion] a year on various efforts to 'sell' EU integration, including everything from straightforward advertising, to more subtle attempts to convince people of the merits of 'ever closer union' through cultural, educational and citizenship initiatives."

Over the last 100 years, Czechs have lived under Austrian imperialism, German Nazism, and Soviet communism. Throughout those trying times, they hoped one day to regain their national independence and democratic freedoms. Today those two are threatened again. Clearly, the European Union is not Nazi Germany or communist Russia. No one is killed or jailed for being against the cause of greater European integration. But the diminution of Czech independence and freedoms is both real and relentless.

The Irish may have said Yes to the Lisbon Treaty, but the bureaucrats in Brussels have not yet won. If anything, the shameful browbeating of the Irish electorate into reversing its previous rejection of the Treaty will steel the resolve of those who oppose additional centralization of power in Brussels. Czech President Vaclav Klaus has so far refused to sign off on the Treaty that the Czech parliament has already adopted. The president is officially waiting for a decision from the highest Czech court on the treaty's constitutionality. The opponents of the treaty in the Czech parliament hope to prolong the legal challenges until the British have had a chance to vote it down in a referendum that the Conservatives, who are set to win the next election, promised to hold midway through 2010.

European Union politicians like to lecture foreigners on the importance of democracy. Yet, the EU itself has entered a post-democratic age. Increasingly, it is run by unelected and unaccountable technocrats in Brussels who are disdainful of public opinion. In 2005, when French and Dutch voters defeated the proposed EU Constitution — which would have massively expanded the power of Brussels — the Eurocrats repackaged the Constitution as the Lisbon Treaty, which supposedly required no plebiscites.

The Irish constitution required a referendum, however, and the Irish rejected the Lisbon Treaty in June 2008. Seven years earlier, the Irish similarly rejected the Treaty of Nice, which also enhanced the power of Brussels. Back then, the Irish were made to vote again and, after months of taxpayer-funded government propaganda, they gave the answer Brussels wanted. The same sham was played out over the last few months and, once again, Brussels got its way.

But, Lisbon may still be derailed by President Klaus and his allies. Enjoying approval ratings of around 70%, Mr. Klaus knows that the Czech citizens don't care that much for the Lisbon Treaty. Brussels will, no doubt, try to intimidate the Czech public with all kinds of veiled threats,as they did in Ireland. Mr. Klaus, though, understands that his obstinacy may erode his popularity, but cannot destroy it. After all, if he can hold out until the middle of 2010, it will be the British who will take the blame for killing the Lisbon Treaty.

Mr. Klaus also knows that after four decades of rule from Moscow, many Czechs remain opposed to being ruled from Brussels. Lastly, Mr. Klaus knows that the EU subsidies that Brussels periodically uses to extract political concessions from Europe's poorer and smaller countries have no effect on economic growth. Whether the Czechs receive net financial transfers from Brussels or do not, their economy will grow in accordance with the health of the global economy and Czech business environment, which is mostly a result of Czech legislation.

If all else fails, the pro-Treaty members of the Czech parliament may even try to impeach Mr. Klaus, according to the Czech press. It is highly unlikely, however, that they would get the required majority for such a dramatic move. Moreover, the Czech constitution states that the president can only be impeached if he commits high treason against Czech independence, territorial integrity and democratic order. Yet those are precisely the values that Mr. Klaus's opposition to the Lisbon Treaty aims to protect.

The process of passing the Lisbon Treaty revealed a side to European integration that few people like. It is an ugly face of condescension and bullying. Mr. Klaus must expect to be subjected to intense pressure, but freedom-loving Europeans hope that he remains standing firm.

But the fat (Czech) lady has yet to sing.

Five years ago members of the EU advanced a continental constitution to create a consolidated government in Brussels, with a president and foreign minister, increased "competencies," or responsibilities, for the EU, and fewer national vetoes over other issues. But in 2005 the Dutch and French peoples voted no.

After that democratic debacle, the Eurocratic elite wheeled out a slightly revised contitution in the form of a treaty requiring only parliamentary approval. Although polls indicated that majorities in every EU member desired to vote on the treaty, only Ireland (by its constitution) required a popular ballot. In June 2008 the Irish shocked the European establishment by rejecting the accord.

The EU elite reacted predictably by closing ranks and scheming to overturn the popular will. The point is not that it is necessarily wrong to create something closer to a European nation state. (Personally, I believe Europeans are risking their liberties for little practical benefit, but it is their decision to make.) However, as Larry Siedentop, author of Democracy in Europe, notes: "the EU seems blind to a central insight of liberal democratic thought — that the means of reaching public decisions are just as important as the ends."

Last month European Commission president Jose Manuel Barroso claimed "We respect the vote of the Irish people," but if so he was the only person in Brussels to do so. Some Eurocrats proposed to toss Dublin out of the EU or at least consign it to second-class status. Most demanded that the Irish vote again — and get it right this time.

The anger over the democratic process was palpable: How dare the Irish thwart the will of 500 million Europeans, not that any of the other 495 million had been allowed to express that will at the polls? Declan Ganley, head of the group Libertas, wrote: "we Irish behaved badly, and were therefore required as a matter of course to vote again. Nearly every EU leader agrees with this. Their own people must not vote, but the Irish must vote twice."

So the Irish held another referendum on October 2. Treaty advocates played on concern over the economy — Ireland was hit particularly hard by the financial collapse — claiming that another no vote would somehow distance Ireland from the continent. Yet France and the Netherlands faced no such punishment after voting no four years ago. In fact, Lisbon is irrelevant to European economic cooperation.

The other EU members also promised future (and unenforceable) treaty changes to address Irish concerns. Moreover, the Irish government, EU officials, and politically oriented businesses ran a concerted and well-funded pro-campaign against a weakened opposition. The result was a solid yes.

That would seem to resolve the issue. Except for one person: Czech President Vaclav Klaus.

Both Klaus and Polish President Lech Kaczynski held off signing the treaties, a necessary constitutional step after parliamentary ratification. Notes Jan Techau of the German Council of Foreign Relations, the two "are lone riders who are not easily influenced by external factors." Kaczynski promised to sign if the Irish said no. Klaus, a confirmed skeptic of consolidating power in Brussels, did not.

The latter's refusal has led to a myriad of threats from Czech and EU treaty advocates. French President Nicolas Sarkozy declared that "It will be necessary to draw the consequences," whatever that means, from continued Czech resistance.

But the independent Klaus, who spent years resisting Czechoslovakia's communist government, seems unlikely to cave. In fact, Czech politicians are uncomfortable pressing him. Explains Stefan Fule, the Czech Minister for European Affairs: "The government prefers negotiation and we will continue negotiating with Mr. President."

Moreover, Klaus now has a strong justification for holding back. Seventeen Czech senators have challenged the Lisbon Treaty before the nation's constitutional court.

Most observers expect a positive verdict. Earlier this year the court upheld the treaty in a similar challenge. But the ruling could take months. And it is possible that the Czech court will follow its German counterpart in requiring the parliament to make legal changes in the treaty's application to satisfy the constitution. That process would add more time.

Alone, delay by Prague should simply slow the Eurocrats in their scramble for new high office. But behind the fat (Czech) lady lurks British Conservative leader David Cameron.

The Labour government originally promised a vote on the European constitution, but refused to hold a referendum when it ratified the Lisbon Treaty. Not all Labourites were happy: former health minister Gisela Stuart complains of Lisbon, "The nature of democracy is really at stake."

However, a parliamentary election is due next by next June. Although nothing is certain in politics, Cameron is likely to become prime minister, and he has promised to suspend Britain's ratification while holding a referendum on the treaty. The result almost certainly would be no.

So Vaclav Klaus doesn't have to refuse to sign the Lisbon Treaty forever. He merely needs to not sign until the Tories take power. After which London could push the Lisbon project off the rails. In fact, the Daily Mail reported on a letter from Cameron to Klaus: "Cameron has told Klaus that if he can hold out for a few months, he'll be right there with him."

No surprise, this possibility "is the source of much angst in Brussels and other EU capitals," notes Economist columnist Charlemagne.

Still, defeating the treaty remains a long shot. The Czech court's general secretary, Tomas Langasek, said: "The ruling will definitely take weeks and months but I can guess it will not go beyond the end of the year." If so, pressure will mount on Klaus — whose position incorporates more ceremonial function than government authority — to complete the process initiated by the elected parliament.

And if Lisbon goes into effect before the British election, Prime Minister Cameron will possess no veto. He says the party would reconsider a vote under such circumstances, though Lorraine Mullally of the group Open Europe points out that polls indicate a majority of Britons want to vote even then.

Mullally suggests that London "link demands for reform to the EU budget — and link that to a referendum," since negotiations will commence next spring over the EU's seven-year "Financial Framework." But threatening to block the EU budget to force reforms to Lisbon is a nuclear option, not for the faint-hearted. Whether the Tories, busy celebrating their long-awaited victory, would be willing to so directly challenge the rest of Europe is unclear.

Thus, the Eurocrats still might win. But it could prove to be a Pyrrhic victory. It is one thing to create a government superstructure. It is quite another to create a popular foundation, a demos to sustain a new government.

As yet, no such European identity exists. The Economist notes the EU's "lack of legitimacy among Europe's voters," but the Lisbon process has not filled the gap. To the contrary, President Klaus warns of creating "a situation where the citizens of member countries would live their lives with a resigned feeling that the EU project is not their own."

The expectation that creation of a European foreign minister and diplomatic service would result in a unified continental foreign policy also likely is overly optimistic. Andrew Duff of the European Council on Foreign Relations worried: "Europe's loss of global credibility [from rejection of Lisbon] would leave China and America largely to their own devices." But deep divisions over global issues remain within the EU and European states don't want to spend enough to create a credible and deployable military. Without political unity and military capability, China and America still will be left "largely to their own devices."

The most serious flaw in the Lisbon project, however, is the threat to representative government. There is no reason in theory that Europe cannot construct a continent-wide democratic system. But it is impossible to do so by imposing such a system on an unwilling people. Bill Emmott of the Times of London is scathing: "A constitutional exercise that when it began in 2001 was supposed to make the EU more democratic, transparent and comprehensible to its citizens is doing just the opposite."

In fact, transferring power from 27 accountable national assemblies to a less accountable continental assembly, warns Siedentop, "can breed cynicism about representative government: on the one side, power without real authority; on the other, authority with less and less power. Might the European and national parliaments discredit each other?"

If the result was a freer political order and less onerous state, we should welcome Lisbon's corrosive effect. But European history suggests that such a process could just as easily move in the other direction. Indeed, the recent election of two members of the overtly racist and anti-Semitic British National Party to the European Parliament could be an ugly portent.

With the Irish vote, Europe has taken a major step towards consolidated government. But the fat (Czech) lady has yet to sing. The future of representative government in Europe may depend upon President Vaclav Klaus willingness to stand firm.

The EU is two organizations. The first is a common market, the term by which the organization once was known. The EU knocks down national trade barriers, allows free capital and labor mobility, and standardizes economic rules. The result has been to promote economic liberty and development.

The EU's second role is to act as a continental political unit. This objective remains less complete and more controversial.

The European balance has shifted significantly toward Brussels in recent years. Nevertheless, the EU's president is a country, not a person, and serves only six months. The most important powers remain with national parliaments. The EU possesses little foreign policy authority.

Five years ago the European leadership drafted a continental constitution. The objective was to turn the EU into something much closer to a nation, extending control by Brussels over more issue areas and reducing national vetoes over EU decisions.

Constitutional revisions typically require referendums, and Dutch and French voters quickly rejected the new scheme. The Eurocratic elite briefly retreated in shock, before making a few minor changes and reissuing the constitution as the Lisbon Treaty, allowing parliamentary ratification by every nation except Ireland.

Last year Irish voters rejected the proposal to give Brussels significant new authority at the expense of the organization's individual 27 members. Earlier this year the German Constitutional Court voted to uphold the Lisbon Treaty only if the German parliament approved legislation ensuring the latter's continuing role in making decisions on core national issues.

Even if Ireland says yes this time, treaty advocates fear that pressure will grow in other nations to legislate similar caveats. London's Open Europe think tank forthrightly declares: "British MPs need to wake up — and demand the same powers." Similar rumblings have been heard in France and the Netherlands.

Judging the merits of a stronger continental government obviously is a task for the Europeans. French President Nicolas Sarkozy argued simply: "Europe cannot be a dwarf in terms of defense and a giant in economic matters."

But the continent faces few obvious security threats. Whatever Russia's relationship with Georgia and Ukraine, the likelihood of Moscow committing aggression against existing EU members is somewhere between nil and zero.

Moreover, there isn't the slightest evidence that European peoples and governments are willing to devote significantly more resources to the military. European leaders have yet to meet their April promises of an additional 5,000 soldiers for Afghanistan.

Irish Sen. Deirdre de Burca nevertheless claimed: "If I had to name just one compelling reason to support the Lisbon Treaty, however, it is because the treaty will enhance the capacity of the EU to become a more effective actor at an international level."

The accord would create a more unified organization but not more unified views behind it. There is no common foreign policy today nor is there any common foreign policy in the offing. Without that unity, nothing would really change, even with a nominal foreign minister.

Although a consolidated government in Brussels is not necessary to maintain Europe's domestic single market, it could more intensively regulate the continental economy — which would not necessarily be beneficial.

Moreover, the political will for doing more is limited. A recent poll found that 70 percent of Germans, with the largest economy on the continent, oppose bailing out other nations.

What if the treaty nevertheless passes? A government that can be created only by preventing most of its people from voting for it is likely to be more a hollow shell than a solid mass.

Earlier this year Czech President Vaclav Klaus spoke to the European Parliament: "There is no European demos — and no European nation," which intensifies the problem of "the democratic deficit, the loss of democratic accountability, the decision-making of the unelected."

In fact, despite the increasing power of the European Parliament, few Europeans base their votes EP candidates on European issues.

In the recent EP elections voters across the continent instead used the poll to reward or punish various ruling or opposition parties for their domestic actions.

None of the many proposed reforms of the EU get to the organization's essential flaw. Perhaps President Klaus's "European demos" will eventually develop. But attempting to force a consolidated government on an unwilling populace is more likely to undermine popular support for the European project.

Nationalism is strong and even growing in many nations. In contrast, there are only enough European nationalists to fill a few buildings in Brussels. Irish approval of the Lisbon Treaty won't change that.

However, history has begun again. Russia may have no interest in conquering its neighbors, but last year in Georgia Moscow demonstrated that it would assert itself along its border. The Bush administration responded with words rather than bombs. Now the Obama administration has dropped missile-defense plans for the Czech Republic and Poland.

The result was predictable cries of betrayal abroad and capitulation at home. Disquiet was expressed by not only the Czech and Polish governments, but also other neighbors of Russia, such as Lithuania.

Former Polish President Lech Walesa even complained that "The Americans have always tended to their interest only and have taken advantage of everyone else." However, which European state does not pursue its interest? Including expecting Washington to risk American lives and treasure to defend countries unwilling to spend much on their own defense?

In any case, better relations between Washington and Moscow are likely to lower tensions between Russia and its neighbors. No one gains from two nuclear powers challenging one another while maneuvering military forces in close proximity, as in Georgia last year. Any U.S.-Russian conflict would likely engulf most of Moscow's vulnerable neighbors.

Moreover, the illusion that the United States would rush to the aid of distant, hard-to-defend states with little relevance to America's security could only mislead nations like Poland. John Bolton called the missile decision "a near catastrophe for American relations with Eastern European countries and many in NATO," but the real catastrophe would be for more countries to mimic Georgia in provoking Russian military action in the expectation of U.S. support. A heightened risk of war with Moscow is a high price to pay for better relations with dependent states.

Rather than bemoan the Obama administration's shift, nations in Central and Eastern Europe should act on the obvious wake-up call. No longer should they entrust their fates to a large, distant and (like them) self-interested power. In the end, they must rely on their own efforts. This is as it always has been. For centuries peoples in this region have lived uncomfortably in the shadow of neighboring great powers. The demise of the Soviet Union offered sudden liberation, but no permanent guarantees. Last year's Russo-Georgian war illustrated the uncertainties of even peaceful times.

During that conflict, said Lithuanian President Valdas Adamkus: "Let's stand together united and victory will be on our side." But the Central and Eastern Europeans had little practical help to offer Georgia, the European Union made only symbolic gestures and Washington preferred to bluster. Some observers saw then and continue to see the problem as the lack of NATO membership for Tbilisi. Ron Asmus of the German Marshall Fund contends: "We must take real steps toward solving this problem by providing strategic reassurance to Central and Eastern Europe through the front door of NATO and not the back door of missile defense."

However, the problem is not membership in the club, but geopolitical interest — or lack thereof. Washington had reason to risk much during the Cold War to prevent Soviet domination of Western Europe. The United States is little affected by Russian influence in nations once belonging to the Warsaw Pact, or even part of the Soviet Union itself. "Old Europe" is similarly less interested in the fate of countries as they range further east. Where the United States and leading European states might draw the defense line against Russia is hard to say, but draw it they very well might, irrespective of the formalities of the transatlantic alliance.

Moscow understands the geopolitical disparity. A conflict along Russia's southern border matters much more to Russia than to America or Europe. Even had Georgia been part of NATO last year, Moscow likely would have struck and NATO likely would have temporized. The Baltic nations are equally distant and indefensible. Poland is better situated, but hardly secure. For all of these countries allied intervention would be anything but automatic. After all, in 1939 Britain and France guaranteed Poland's security and even declared war on Nazi Germany — but then did nothing as the latter conquered Poland. There would be no more enthusiasm today for risking a showdown with nuclear-armed Russia in its geopolitical backyard. Any state leaving its security up to outsiders in such circumstances risks catastrophic disappointment.

Vulnerable nations should adopt a different approach. First, they should forge better relations with Moscow. That does not mean sacrificing national independence, but it does mean taking the interests of other countries into account. Certainly it means not deliberately antagonizing more powerful neighbors.

Some might characterize this course as shameful appeasement, but it is really good sense. If you live next to a hungry bear, you should not provoke it. Former–Polish Defense Minister Alexsander Szczyglo complained of the Obama administration's missile decision: "The Russians will have a voice in the affairs of this part of Europe." But that seems inevitable, just as the United States has more than a little influence in Latin America. Just ask Honduras, under pressure from Washington for ousting its president in a constitutional dispute.

Yet prior to the victory of Donald Tusk in 2007, the Polish government seemed intent on offending both of its big neighbors. Georgia's determination to violently reassert control over Abkhazia and South Ossetia irrespective of the preferences of residents of those territories and the views of Russia made conflict in the Caucasus inevitable.

Adam Chmielewski of the University of Wroclaw in Poland argues that the missile decision "may only help Poles to understand that they have no other geopolitical choice but to make friends with Germans and Russians alike, and to abandon their own foolish policy of 'two enemies'." To some degree the Tusk government already has embarked on such a course, especially looking west. Accommodation between Georgia and Russia will be more difficult, but that is as much the fault of Tbilisi as Moscow. President Mikheil Saakashvili may posture as a democratic champion, but his aggressive and impulsive behavior serves his own people ill.

Of course, diplomacy is not always enough. Equally important is developing military assets and relationships sufficient to deter if not defeat Russia. None of Moscow's neighbors alone can match Russian military strength, even significantly attenuated after the Cold War. However, all could make themselves largely indigestible.

Ukraine already would be difficult for Moscow to intimidate, let along swallow. Kiev may be more vulnerable to an energy cut-off than military action. Confronting Poland should be no mean task for Moscow. Other countries could charge a high price for hostile Russian action.

Yet nations which claim to feel threatened by their big eastern neighbor (no one appears to be much concerned about Germany) spend surprisingly little on the military and place surprisingly small proportions of their populations under arms. The United States., facing no existential threat like that during the Cold War, devotes a much larger percentage of its GDP to the military. Max Boot of the Council on Foreign Relations contends that such countries "should double their military spending to make themselves into porcupine states that even the Russian bear can't swallow."

The issue is not just military budget but force structure. Washington has provided generous subsidies to NATO aspirants, but not to prepare for their own defense. Neil Barnett, an associate analyst at Center for European Policy Analysis, reports that the latter nations "are developing armies focused on the deployment of units from platoon to battalion strength to theatres like Iraq and Afghanistan." He instead advocates territorial defense, suggesting that Eastern and Central European countries emphasize "something like partisan or insurgent resistance to an invader."

Indeed, these states have been wasting scarce resources elsewhere with Washington's encouragement. Countries ranging from Albania to Georgia to Poland to Ukraine have deployed troops to Iraq; in fact, the United States had to rush Tbilisi's two thousand soldiers back home after the outbreak of hostilities last year. Many of the same countries have sent small units to Afghanistan. Politicians in affected nations have assumed that such aid — marginal for Washington irrespective of how significant a burden for them — entitled them to protection by the United States.

This resource diversion continues. U.S. Marines are training Georgian troops for deployment to Afghanistan. Yet Marine Corps Commandant General James Conway observed that counter-insurgency skills "aren't very helpful when it comes to main force-type units if there were to be engagement of nations."

Although the U.S. embassy in Tbilisi described the Georgian contingent as a "vital contribution," the one-hundred-seventy-man contingent obviously will make no difference to the U.S. war effort. The Georgians continue to hope to win Washington's favor, even though their earlier participation in Iraq failed to convince the Bush administration to intervene last year. Alexander Rondell of the Georgian Foundation for Strategic and International Studies, lets hope trump experience in contending that the current training mission reinforces the two nations' strategic alliance: "It means Georgia continues to enjoy American protection."

The Central and Eastern Europeans also need to cooperate more intensively with each another. Before World War II, Czechoslovakia, Romania, and Yugoslavia formed the "little entente." Its impact was limited, but there was little that could have restrained Nazi Germany's ambitions. Russia's objectives are far more limited.

A new "little entente" should seek to deter Russia by raising the cost of military action against any of its members. Toward this end states in the Caucasus, Baltic region, and Central and Eastern Europe should work together. Relatively wealthier nations to the west, such as the Czech Republic and Hungary, could assist weaker countries in weapons acquisition and force training. Larger nations, such as Poland, could consider providing more direct aid should conflict engulf smaller members.

Hopefully this is all idle theorizing. Absent the sort of provocation provided by Georgia's Mikheil Saakashvili last year, war between Russia and any of its neighbors seems unlikely.

Nevertheless, the possibility remains worrisome — for the latter as well as for the United States and "Old Europe," which are expected to ride to the rescue in any conflict. Another continental or global conflict, and especially one over such minimal geopolitical stakes, would be particularly tragic after Washington and Moscow avoided turning the Cold War into another Great War.

Administration critics prefer to simply ignore America's interest. For instance, Matthew Omolesky at the Laboratoire Europeen d'Anticipation Politique in Paris argues that backers of the missile system "have provided ample evidence of their good faith," but good faith should not be the criterion for an American decision to risk war.

Zbigniew Lewicki of Warsaw University was even harsher, contending that the missile decision indicated that "President Obama is ready to sacrifice the interests of Central European countries." To the contrary, the decision suggested that the administration was going to stop sacrificing U.S. interests for Central and Eastern Europe, which favored the missile system because they saw it as directed against Moscow. American security in Europe starts with peace with Russia.

History continues to run. The administration's decision should remind the Central and Eastern Europeans of an important lesson. In the event of a confrontation with Russia, they can rely on no one but themselves.

Remember the good-old days when the perceived Soviet threat had served as an opportunity for politicians, bureaucrats and interest groups, encompassing what President Dwight Eisenhower called the Military-Industrial Complex, to stimulate new arms races in the name of protecting U.S. interests and defending its allies?

Indeed, Republican lawmakers and neoconservative pundits depicted the shelving of Bush-era plans for the deployment of 10 missile interceptors in Poland and a radar in the Czech Republic as nothing short of capitulating to pressure from Moscow by abandoning two key eastern European allies, warning in somewhat apocalyptic terms that the move weakens U.S. status in the region and encourages Russian aggression.

Expect the sounding of the alarm by the same critics in the coming days: Beware. The Spirit of Yalta is haunting Eastern Europe and could bring about the "Finlandization" of Poland, the Czech Republic, Ukraine, the Baltic states.

But according to Bush Administration officials and its allies in Congress, the U.S. defense system in Poland and the Czech Republic was not aimed at defending these two countries against a potential threat from Russia — but was intended to protect Europe against future missiles from Iran. Now that the Obama Administration, with the full support of the U.S. military, has proposed to replace the Eastern European based missile defense shield with a more mobile, agile and cheaper naval-based missile defense system, the Republicans and neoconservatives who are deploring this decision seem to be admitting that the main strategic rationale behind the deployment of the missiles in Poland and the Czech Republic was, in fact, to keep Russia — and not Iran — in check.

It was not surprising, therefore, that the Russians — who lest we forget had already dissolved the Warsaw Pact and the entire Soviet Union and withdrawn their military forces from Eastern Europe — have regarded the planned defense system in Eastern Europe, coming after the continuing extension of NATO to their borders, as part of an aggressive American posture. After all, Russia has no plans to deploy a similar system in Cuba.

Those who disregard these genuine Russian concerns tend to draw attention to the alleged fears among Poles and Czechs over the Russian threat to their security and, hence, the need to deploy the U.S. missiles in Eastern Europe. But then, according to opinion polls, majorities in Poland and the Czech Republic have been opposed to the plan.

And if, indeed, both the Poles and the Czechs are so worried about Russia's military might, why is it that in the list of countries ranked by order of military expenditure as a percentage of GDP, Poland and the Czech Republic are respectively in the 95th place and 135th places (according to the World Fact Book 2008 published by the CIA)?

These numbers indicate the relatively low priority these countries place on military expenditure and suggests that their leaders are either not really worried about the threat from Russia; or more likely, they are expecting the U.S. to serve as their protectors. Indeed, reflecting the strategic goals espoused by some of the elites in Washington and in capitals in Eastern Europe, the planned missile defense shield would have served as a "trip-wire" — not unlike the American troops stationed in the divided city of Berlin during the Cold War who were expected to lead to U.S. military retaliation if and when the Soviets attacked West Germany.

But while the American people and Congress had conducted an extensive debate over U.S. strategy in Europe during the Cold War, and the American commitment to protect West Germany from Soviet aggression enjoyed wide bipartisan and public support, the notion that Americans were going to die defending Poland and the Czech Republic against real or imagined Russian threat has never been introduced as part of the national conversation. Instead, those promoting the deployment of U.S. missiles in Eastern Europe had hoped to present the American people with a fait accompli in the form of this trip-wire.

The Obama Administration should be complimented for disrupting this planned sneaky move to press the U.S. into another long-term and costly military intervention at a time when American military forces are overstretched and its budgets are soaring to the stratosphere, and most important, America is not facing a geo-strategic and ideological threat in the form of the Soviet Union.

But as political economist F. A. Hayek warned in his 1944 book The Road to Serfdom, those who during a major war "have tasted the powers if coercive control" will always find it difficult "to reconcile themselves with the humbler roles they will then have to play" in the aftermath of the war. By scrapping the planned missile defense shield, Obama is helping to accelerate this process of reconciliation.

But for the reset to work, Russia must also back away from provocative actions it is taking in America's backyard. In particular, Moscow needs to end its political and military flirtation with Venezuelan dictator Hugo Chavez. Instead, the Kremlin seems to be escalating its hostile and destabilizing moves. In the summer of 2008, a Russian general spoke of the possibility of Russia acquiring a military base in Venezuela. While civilian leaders quietly disavowed such intentions, in the following months Russian naval forces conducted joint maneuvers with Venezuelan units, and there has been a proliferation of arms sales, which topped the $4 billion mark by September 2009. The latest installment, which Chavez announced on September 13, is a $2.2 billion "loan" from Russia to purchase tanks, air-defense missiles, and other hardware.

Such manifestations of close political, economic, and military cooperation between Caracas and Moscow is more than a matter of academic interest. Relations between Venezuela and neighboring Colombia have deteriorated markedly in recent years, and tensions along their border have flared on several occasions. Most, although not all, of the provocations have come from the Venezuelan side, including Chavez's blatant support for the radical leftist insurgency in Colombia, spearheaded by the Revolutionary Armed Forces of Colombia (FARC). Russia's willingness to boost Chavez's military capabilities makes Moscow an enabler of such behavior.

Perhaps most worrisome, Chavez has recently indicated an intention to commence a nuclear program. Given his track record of duplicity, Venezuela's neighbors understandably view with some skepticism his assurances that such a program would be solely for peaceful purposes. It is also quite likely that Chavez hopes — and perhaps assumes — that Russia would aid the development of a Venezuelan nuclear effort in much the same way that the Kremlin has aided Iran's program.

This increasingly cozy relationship between Moscow and Caracas approaches, if it does not already cross, a red line when it comes to U.S. interests in the Western Hemisphere. It has been a long standing policy of the United States — beginning with the proclamation of the Monroe Doctrine in the 1820s — not to allow European powers to establish political or military clients in the hemisphere. Cuba, of course, has been an irritating exception to that policy for the past fifty years, but American leaders need to make it clear both to the Chavez government and the Medvedev/Putin administration that Washington will not tolerate another exception.

Unfortunately, as the United States grew more powerful in the early twentieth century, the Monroe Doctrine became perverted into a policy that included U.S. attempts to meddle in the internal political affairs of its Latin American neighbors. Any effort to revive the Monroe Doctrine must take precautions not to go down that same path.

Even as the Obama administration should enforce the original intent of the Monroe Doctrine with respect to Venezuela, it needs to stress that if Chavez refrains from becoming a Russian client and avoids actions that threaten Colombia or other states in the hemisphere, the United States will not seek to undermine his regime. As a tangible reassurance on that front, Washington should rescind plans to establish seven military bases in Colombia, a step that has generated fierce criticism from governments throughout South America. Ostensibly, those bases are designed to help wage the war on drugs in the Andean region (a dubious enough motive), but Chavez argues that their actual purpose is to intimidate Venezuela — or worse, to serve as staging areas for an attack. Abandoning plans for the bases would effectively discredit that argument and reassure uneasy Latin American leaders.

Chavez may be an odious, authoritarian thug, but his abuses inside Venezuela are up to the Venezuelan people to deal with. They do not pose a threat to important U.S. security interests.

A Russian-instigated arms buildup, to say nothing of the onset of a nuclear-arms race in the Western Hemisphere, is another matter entirely. Such actions menace the political and military stability of the region and undermine Latin America's status as a nuclear-weapons-free zone. That prospect is very much a matter of legitimate concern to the United States. Washington should convey a message — in words of one syllable, if necessary — to both Caracas and Moscow that they are playing a very dangerous game. Chavez needs to know that his current course could lead to a regime-ending event. And Moscow needs to be told that even reasonably good relations between Russia and the United States will depend significantly on a change of its policy regarding Venezuela.

President Obama has made a conciliatory gesture with the end of the missile defense plan for Central Europe. It is time for Medvedev and Putin to reciprocate.

The Lisbon Treaty is the perfect example of such a power grab. Among other things, it shifts responsibilities from national parliaments to European parliament, reduces the number of areas where unanimity is required (eliminating national vetoes), creates a president as a person (as opposed to rotating presidencies for nations) and creates a foreign minister to push a continental foreign policy.

In June 2008, Ireland voted against the treaty. Since the agreement requires unanimous support, the referendum theoretically killed the attempt. However, the European elite insisted that Ireland vote again. Dublin will hold a revote Oct. 2.

Members of the European Parliament (MEPs) are unwilling to debate popular dissatisfaction with a consolidated government. Hans-Gert Poettering, the last president of the European Parliament (EP), even advocated locking out anti-federalists: "I think it is very important that the pro-European MEPs cooperate well so the anti-Europeans cannot make their voices heard so strongly."

An Open Europe poll from 2007 found that roughly 75 percent of Europeans — with a clear majority in every nation — wanted to vote on any new treaty transferring power to Brussels. Lisbon likely would fail in about half of the EU member states.

No wonder former French President Valery Giscard d'Estaing, who played a leading role in drafting the original constitution, opined about the need "to avoid having referendums."

Spanish EU Commissioner Joaquin Almunia claimed that it's not "very democratic" to hold a referendum on complicated issues like the Lisbon Treaty. German Interior Minister Wolfgang Schaeuble declared, "A few million Irish cannot decide on behalf of 495 million Europeans."

Some Treaty advocates proposed throwing Ireland out of the EU or relegating the country to associate status. Most, however, preferred to pressure Dublin to hold another poll.

To sweeten the pot, so to speak, other European governments have promised several future concessions. Yet last December, Irish Foreign Minister Micheal Martin said, "We will not be asking people to vote on the same proposition."

What Dublin received, however, was the promise of future action, not present amendments. To Irish Socialist MEP Joe Higgins, the guarantee process is "an elaborate charade." Similarly, explained Open Europe's Lorraine Mullally, "Despite lengthy negotiations and lots of superficial statements about 'respecting' the Irish 'no' vote, not a single comma has changed."

Regardless, if it doesn't succeed the second time around, threatened one German Socialist MEP, Ireland will face "isolation" and "second-class" status. British MEP Daniel Hannan wrote of an Irish friend who told him, "We didn't fight off the might of the British Empire just so as to be bossed about by the Belgians."

Moreover, the Czech and Polish presidents have to yet to sign off on the agreement. If Britain's Conservatives come to power before the Lisbon process is completed, they are likely to reverse the Labor government's ratification.

Oxford professor Timothy Garton Ash wrote in the Guardian of "the essential grandeur of this project we call the European Union, where nations born in so much blood work together freely in a commonwealth of democracies."

He's right, but his argument actually works against the Lisbon Treaty, or at least the current ratification process. Democracy doesn't mean drowning out the voices of those who would be forced to live under the government.

The United States and Britain have had the largest "stimulus" programs of the major economies (as measured by increases in government spending and deficits relative to gross domestic product) and yet they are not moving toward recovery as rapidly as most other countries that had far smaller stimulus programs or none.

Many, including yours truly, have argued that the big increases in government spending were more likely to cause, rather than cure, problems, just as such policies led to a much longer period of decline during the Great Depression of the 1930s.

Despite doing better than the United States and the United Kingdom at the moment, France is still far from being a poster child for good economic policy. Its economic growth rate has lagged behind those of the United States, the United Kingdom, Ireland and many other European countries for most of the past three decades, largely because it did not make the economic reforms the others did. There seems, however, to be a growing awareness among the French that they can do better.

In recent years, a number of pro-free-market think tanks and taxpayer associations have been formed in France, and their effectiveness and impact clearly are increasing. These groups include Institut Economique Molinari, the Institute for Economic Studies-Europe, Institut de Formation Politique, Contribuables Associes (French Taxpayers Association), etc.

In part because of their efforts, France has sharply reduced its corporate income-tax rate so it is lower than the U.S. rate. France also has been reducing its individual tax rates so that many Frenchmen now pay a lower maximum tax rate than do the taxpayers of New York, California and many other states.

If the tax-rate increases proposed by the Obama administration and the Democratic Congress are passed into law, all upper-income Americans will be paying higher personal tax rates than the wealthy in France.

The economic reforms in France have not been sufficient to keep large numbers of wealthy French from moving much of their savings and investment to other countries. Rather than make their tax laws sufficiently competitive to keep their capital at home, the French have been on a crusade to force other countries to raise their tax rates and engage in widespread tax information sharing.

These bad habits have been picked up by many in the U.S. Congress as it pushes for legislation to discourage the free movement of capital along with the destruction of financial privacy. The result will be slower economic growth throughout the world, less job creation and more economic misery.

Next door to France is a neighbor that does a far better job in managing its economy — Switzerland. Even though, unlike France, it has few natural resources, Switzerland has maintained a sound currency for decades, along with relatively low tax rates and government spending, yet has managed to deliver a far higher quality of government services than the French and much higher real incomes for its citizens. Rather than emulate the Swiss, many in France try to pressure the Swiss to engage in counterproductive economic and banking policies.

This past week, the French think tank the Institute for Economic Studies-Europe hosted the sixth annual European Resource Bank meeting in Marseille, which brought together two dozen free-market organizations from European countries for a discussion of how they can make all of their institutions more effective and influential. Speakers included a number of leading European and American economists and think-tank leaders as well as Vaclav Klaus, president of the Czech Republic, who is also a noted economist.

The current French economic model continues to be far less attractive than economic models in Asia, other European Union states and Switzerland. However, there is good reason to believe that in future years, the French will modify their model so it becomes more, rather than less, attractive.

The EU is two organizations. The first is a common market, the term by which the organization once was known. The EU creates a continental market, knocks down national barriers, allows free capital and labor mobility and standardizes economic rules. Despite today's tendency towards micromanagement from Brussels—controlling the size of vegetables sold and salt content of bread consumed—the result has been to promote economic liberty and development.

Although the EU's role as a single market is no longer controversial, challenges remain. Existing members have grown wary of accepting workers from more populous, less prosperous states. Some more-developed European states have had "buyer's remorse" when it comes to Bulgaria and Romania, which have yet to conquer the problems of transitional economies, including entrenched corruption. The prospect of Turkish membership has raised even greater resistance.

The EU's second role is to act as a continental political unit. This objective remains less complete and more controversial.

As the European Coal and Steel Community turned into the European Economic Community (or "Common Market") and then into the European Union, the organization has taken on greater attributes of sovereignty. The European Commission and European Parliament have steadily gained additional "competencies," or areas of authority.

Although the EU still lacks the status of a national government, such as the United States, the European balance has shifted significantly in recent years. British Member of the European Parliament (MEP) Nirj Deva contends that the EU already possesses more power vis-à-vis member governments than Washington does compared to the fifty states.

Nevertheless, the EU's president serves only six months. The most important powers remain with national parliaments. The EU possesses the least authority in the area of foreign policy.

Which has led to the fight over the Lisbon Treaty. Five years ago the European leadership drafted a continental constitution. Even few policy makers knew all the details buried in the complex and prolix document. The objective was to turn the EU into something much closer to a nation, with a consolidated government with increased continental functions. The proposed constitution extended control by Brussels over more issue areas and reduced national vetoes over EU decisions.

Constitutional revisions typically require referendums, and Dutch and French voters quickly rejected the new scheme. The Eurocratic elite briefly retreated in shock, before making a few minor changes and reissuing the constitution as the Lisbon Treaty. The main difference is that treaties are normally ratified by parliaments, not populations.

Why the Treaty? Hans-Gert Poettering, the outgoing European Parliament (EP) president, contended: "We do not want a European superstate—we want a European Union that is strong because no country alone can defend its interests." Whatever advocates call the resulting structure, the existing regime would become much more of a federal structure, with Brussels gaining significant authority at the expense of the organization's individual twenty-seven members.

Indeed, the German Constitutional Court recently voted to uphold the Lisbon Treaty only if the German parliament approved legislation ensuring the latter's continuing role in making decisions on core national issues. The Lisbon Treaty may set the outer reach of power transfers by Germany, at least, to Brussels. Wrote Wolfgang Muenchau of the Financial Times: "European integration ends with the Lisbon Treaty. It is difficult to conceive of another European treaty in the future that could be both material and in line with this ruling."

Treaty advocates fear that pressure will grow in other nations to legislate similar caveats. London's Open Europe think tank forthrightly declares: "British MPs need to wake up-and demand the same powers." Similar rumblings have been heard in France and the Netherlands.

Judging the merits a stronger continental government obviously is a task for the Europeans. French President Nicolas Sarkozy argued simply: "Europe cannot be a dwarf in terms of defense and a giant in economic matters."

It is a nice rhetorical line, but the continent faces few obvious security threats. Whatever Russia's relationship with Georgia and Ukraine, the likelihood of Moscow committing aggression against existing EU members is somewhere between nil and zero.

China is most likely to be the next great power and perhaps superpower. However, it is hard to imagine even a hostile Beijing threatening Europe in any way. Who else might pose a danger? Maybe a well-armed Iran would eventually endanger the Continent, but much must happen before that is true. There's more, however. French Foreign Minister Bernard Kouchner claimed: "We must bear in mind, the necessity of supporting our diplomatic efforts with a common defense, a European defense. . . .Without this European defense our diplomacy lacks strength." Whether true or not, there isn't the slightest evidence that European peoples and governments are willing to devote significantly more resources to the military. At the April Strasbourg NATO summit European leaders promised an additional five thousand soldiers for Afghanistan; so far only seventeen hundred have been forthcoming. Passage of the Lisbon Treaty will not create a continental political will where none presently exists.

Irish Senator Deirdre de Burca recently made a different claim: "If I had to name just one compelling reason to support the Lisbon Treaty, however, it is because the treaty will enhance the capacity of the EU to become a more effective actor at an international level." Wilfried Martens, president of the European People's Party, the largest grouping in the EP, contended that "the EU must be united and able to speak with one voice on the world stage. A changing world in which new powers like China and India play an increasingly important role will not wait for Europe to make up its mind. The EU must instead show leadership through its efforts to solve the world's current problems."

Obviously, the EU already is one of the most important international economic players. But there is more to foreign policy. Complains Charles Grant, director of the Centre for European Reform: "On many of the world's big security problems, the EU is close to irrelevant. Talk to Russian, Chinese or Indian policy-makers about the EU, and they are often withering. They view it as a trade bloc that had pretensions to power but has failed to realize them because it is divided and badly organized."

Would the Lisbon Treaty make a difference? De Burca contends that approval of the Lisbon Treaty would help remedy the fact "that at present the international identity of the EU is weak and fractured." That's unlikely. The accord would create a more unified organization but not more unified views behind it. There is no common foreign policy today nor is there any common foreign policy in the offing. And without that unity, nothing would really change, irrespective of the creation of a continental president and foreign minister.

A more influential Europe would affect Europeans in other ways, though a consolidated government is not necessary to maintain Europe's domestic single market. A more powerful government in Brussels could more intensively regulate the continental economy—which would not necessarily be beneficial—but the political will for doing more is limited. European governments are badly divided over everything from economic stimulus to financial regulation. A recent poll found that 70 percent of Germans, with the largest economy on the Continent, oppose bailing out other nations. Open Europe Director Lorraine Mullally observed: "there have been suggestions that Ireland will somehow be offered a lifeline in this crisis, if only they show their appreciation of 'Europe' and vote in favor in favor of the Lisbon Treaty. It's important that Irish voters realize there is no appetite among German voters for such a rescue package, which will make it very difficult to achieve in practice."

What if the Treaty nevertheless passes?

Lisbon proponents assume a more powerful continental government would result. Yet a government that can be created only by preventing its people from voting for it is likely to be more a hollow shell than a solid mass. The EU has power, but generates little political loyalty from average Europeans. The Economist magazine writes of the EU's "lack of legitimacy among Europe's voters" and "The perception that Europe's legislative machinery is remote and unaccountable." It has been said that MEPs mainly represent themselves.

Despite the increasing power of the European Parliament, few Europeans base their votes for MEPs on European issues. In the recent EP elections, voter turnout was the lowest ever and voters across the Continent used the poll as an opportunity to reward or punish various ruling or opposition parties for their domestic actions. There essentially is no European electorate.

Earlier this year Czech President Klaus spoke to the European Parliament: "There is no European demos—and no European nation," which intensifies the problem of "the democratic deficit, the loss of democratic accountability, the decision-making of the unelected." Approving Lisbon, which would establish a quasi-nation state with little popular support would, Klaus feared, create "a situation where the citizens of member countries would live their lives with a resigned feeling that the EU project is not their own."

Although his views were reviled by members of the EP, Klaus' view received support from the German Constitutional Court. The Court expressly worried about the "democratic deficit," pointing out that "With the treaty, the member states follow the blueprint of a federal state without being able to create . . . a parliamentary government."

And none of the many proposed reforms of the EU get to the organization's essential flaw. Tony Barber, the Brussels bureau chief of the Financial Times, wrote: "Voters sense a yawning gap between the EU institutions, especially the parliament and Commission, and themselves."

Perhaps President Klaus's "European demos" will eventually develop. But forcing through the Lisbon Treaty is unlikely to create a unified Europe. To the contrary, attempting to force a consolidated government on an unwilling populace is more likely to undermine popular support for such an institution.

Writes British Conservative Member of the European Parliament Daniel Hannan: "Democracy and the EU sit uneasily together. All the main transfers of power from the national capitals to Brussels have been effected without popular consent." For good or ill, nationalism is strong and even growing in many nations, including the U.S., China, and Russia. There are enough European nationalists to fill a few buildings in Brussels, but not much more. Irish approval of the Lisbon Treaty won't change that.

Germany's police union, the Bund Deutscher Kriminalbeamter, estimates that about 50,000 cars destined for the scrap yard under Berlin's trade-in scheme have been illegally resold to Africa and Eastern Europe. The government had paid around €125 million for these vehicles to be destroyed so that people would buy new, more fuel-efficient cars. German environmental group Deutsche Umwelthilfe predicts a doubling of illicit exports by the end of the year. It's probably only a matter of time before American clunkers will likewise find their illegal way to the streets of Mexico and beyond. And humanity would be better off if they did.

Imagine if the Salvation Army were ordered to destroy all the used clothing and furniture it receives instead of distributing it to the poor. No doubt this would be considered an outrage. But it is no less economically foolish and morally repugnant to deny poor people in the developing world access to these old cars.

The analogy is of course not exact. Unlike the Salvation Army, the German exporters as well as the African importers are smuggling these cars for personal gain, not out of charity. Yet the welfare benefits for Africa's poor are real, regardless of the motive. And for the record, the German and U.S. governments have forbidden giving away traded-in clunkers along with their export.

The scheme's advocates usually cite economic and environmental reasons — neither very convincing — for why the old cars have to be destroyed. The economic argument says that scrapping cars creates artificial scarcity, thus boosting demand for new auto sales in a recession. Leave aside that scrapping clunkers also raises the prices of used cars, thus penalizing poorer consumers. More importantly, there is evidence that the scheme triggered far fewer additional car sales than assumed. Consulting firm Macroeconomic Advisers estimates that in the U.S. "roughly half of the 250,000 in new sales would have occurred in the months following the conclusion of the program, and the other half would have occurred during the program period anyway." So all the scheme did was to transfer, rather than create, wealth by unnecessarily bribing people to make long-planned acquisitions.

But even where the subsidies may have caused genuine new sales, more money spent on cars simply means less money is available for other items. The German Retail Federation, for example, complains that the cash-for-clunkers program is "sucking out spending" as retail sales fell 1.3% in May and 1.8% in June. For the overall economy, therefore, the net result is probably zero. The idea that destroying items of value will boost the economy might be called in this context, the broken windshield fallacy.

But let's assume the scheme did create additional consumption. There are still far better and fairer ways of boosting demand. Even Keynes, the godfather of government stimulus programs, recommended paying people to dig and fill up ditches — a senseless but at least non-destructive activity. Exporting clunkers produces exactly the same outcome as destroying them — it reduces the supply-demand gap. At the same time, it also creates jobs in the export-import and transport industries in the rich and poor countries while giving people in the developing world access to cheap cars.

This is where the environmental argument for destroying the clunkers comes in. The old cars must disappear, we are told, because they contribute to global warming. Let's look first at the rather dubious claim that trading in your old car for a more fuel-efficient new one reduces carbon emissions. If half of the new sales would have occurred anyway and the other half merely brought forward purchases rather than created new ones, then the real mileage effect appears quite limited. What's more, the energy required to manufacture a car accounts for as much as 45% of its lifetime energy consumption. So replacing old cars with new ones requires a big up-front energy investment. And crushing old cars and converting them to steel consumes more energy than exporting them.

It is true that selling clunkers to the Third World will increase emissions in those countries by increasing the number of cars on the road. But denying those poor people access to affordable cars means lowering their living standards. Lower living standards will of course always reduce energy consumption, but surely that cannot be a desirable policy objective.

Moreover, many of our clunkers are bound to be more efficient and more environmentally friendly than cars currently on the roads of many of the world's poorest countries. Selling the clunkers to them, therefore, could defray the cost of the clunkers programs while also upgrading the stock of cars in Africa and elsewhere. Just as the Salvation Army takes clothes that are one person's junk and sells it to others who are happy to get a good deal on used clothes, the clunkers programs could be moving the cars to where they are most valued, instead of destroying them for scrap.

The availability of cheap used cars will of course only make a marginal difference for people in the developing world. Yet there are no good reasons to deny these people even a marginal improvement of their living standards. Seen in this light, criminals exporting clunkers to Africa are doing more to increase economic welfare than moralistic German politicians and environmentalists spending taxpayers' money to deny Africans a cheap ride.

It's the attitude towards Ireland, which in June 2008 voted to reject the Lisbon Treaty. Since the agreement requires unanimous agreement, the referendum theoretically killed the attempt to expand the EU's authority. However, the European elite viewed the setback as only temporary and insisted that Ireland vote again. Dublin will hold a revote on October 2.

The lack of obvious practical benefits of a consolidated government in Brussels for most Europeans has not prevented the development of a strong elite consensus behind Lisbon. Roger Cole, head of the Irish Peace and Neutrality Alliance, argues bluntly: "The EU political elite supports the treaty because it continues to transfer power away from the people and their own national democratic institutions to themselves and their institutions, the Council of Ministers, the European Court of Justice and the parliament."

Toward this end the Swedish think tank Timbro estimates that the EU spends several billion dollars annually promoting an expanded EU. Lorraine Mullally of the London-based think tank Open Europe complains: The European Commission increasingly "sees itself not just as 'guardian of the Treaties,' but as a political campaign group."

There are few dissenting public voices. Former Czech Prime Minister Mirek Topolanek admitted: "This treaty is bad and we know it." But he said he felt he had no choice but to support Lisbon: "If we hadn't signed the Lisbon Treaty and had been pushed to the sidelines of the European Union we would have had no chance of promoting our national interests. That's the main reason. It was the lesser of two evils."

Members of the European Parliament (MEPs) are no more willing than anyone else to debate popular dissatisfaction with a consolidated government. Hans-Gert Poettering, the last president of the European Parliament (EP), even advocated locking out anti-federalists: "I think it is very important that the pro-European MEPs cooperate well so the anti-Europeans cannot make their voices heard so strongly."

The difference between popular and elite attitudes is stark. An Open Europe poll from 2007 found that roughly 75 percent of Europeans -- with a clear majority in every nation -- wanted to vote on any new treaty transferring power to Brussels. EU Internal Markets Commissioner (Ireland's representative on the European Commission) Charlie McCreevy argued, undoubtedly with some hyperbole, that European leaders "know quite well that if the question was put to their electorate by a referendum the answer in 95 percent of the countries would probably have been No as well." In fact, polls suggest that Lisbon would fail in about half of the EU members.

No wonder former French President Valery Giscard d'Estaing, who played a leading role in drafting the original constitution, opined: "Above all, it is to avoid having referendums."

Twenty-six of 27 EU member states have approved Lisbon by parliamentary vote, usually backed by both the main governing and opposition parties. In Ireland, however, the constitution required a referendum on the treaty. And last June the measure went down to defeat.

Oops.

Although the treaty theoretically was dead, supporters assumed that eventual approval was inevitable: the only question was how?

Ironically, the pro-treaty lobby, which had designed the process to eliminate public input, expressed its democratic outrage over the result. A British Labour MP complained that the Irish had "become extremely arrogant." Britain's Lord Mark Malloch-Brown grandly declared that "I am not sure whether the voters of Ireland should have a right of veto over the aspirations of all the other people of Europe. I am not sure whether that is, or is not, democracy."

Spanish EU Commissioner Joaquin Almunia claimed that it is not "very democratic" to hold a referendum on complicated issues like the Lisbon Treaty. German Interior Minister Wolfgang Schaeuble declared: "a few million Irish cannot decide on behalf of 495 million Europeans."

Some Treaty advocates proposed throwing Ireland out of the EU or relegating the country to associate status. Most, however, preferred to pressure Dublin to hold another poll, as it had after Irish voters turned down another treaty in 2001 before ratifying it in a second vote.

The Irish government has set a repeat vote for October 2. To sweeten the pot, so to speak, other European governments have promised several future concessions, allowing Ireland to retain its national commissioner and opt out of a European foreign policy. After the recent EU summit, Irish Prime Minister Brian Cowen claimed: "We came here with two aims. Ireland wanted firm legal guarantees. We got them. We wanted a commitment to a protocol. We got that."

Well, kind of. Last December Irish Foreign Minister Micheál Martin stated that "we will not be asking people to vote on the same proposition." But what Dublin received was the promise of future action, not present amendments. Irish Socialist MEP Joe Higgins acknowledged: the guarantee process is "an elaborate charade. The so-called guarantees are simply designed to throw dust in the eyes of ordinary people in Ireland to give them the impression that something fundamental has been changed in the Lisbon Treaty," thereby making people think they will be voting on a different document when "It is exactly the same text, word by word, not even a comma has been changed."

Similarly, explains Open Europe's Lorraine Mullally: "Despite lengthy negotiations and lots of superficial statements about 'respecting' the Irish 'no' vote, not a single comma has changed -- if there were any changes at all to the Treaty, then all the other member states would have to re-ratify it. None of the statements made [at the EU summit] are binding in EU law. But even if they were, they do nothing to address Irish concerns."

Treaty advocates argue otherwise, of course. Given its difficulty in selling the treaty, the Irish government is attempting to turn the treaty referendum into a vote on membership in the EU. Jim O'Hara, CEO of Intel Ireland, added: "People don't understand the economic catastrophe that could unfold if we don't get a 'Yes' vote." But few critics of Lisbon want to leave the EU. Since the EU appears to be working as is, they simply see no reason to expand the EU's authority.

The betting is that Lisbon will carry the second time around. (If it doesn't, threatened one German Socialist MEP, Ireland will face "isolation" and "second class" status.) Still, nothing is guaranteed. British MEP Daniel Hannan writes of an Irish friend who told him: "we didn't fight off the might of the British Empire just so as to be bossed about by the Belgians."

Moreover, the Czech and Polish presidents have to yet to sign off on the agreement and if the Tories win next year's election in Britain, they might use a future treaty as an opportunity to demand their own concessions, à la the Irish. And if the Conservatives come to power -- which is as certain as anything in politics -- before the Lisbon process is completed, they are likely to reverse the Labour government's ratification.

Only the Europeans can decide on the EU's future. Timothy Garton Ash wrote in the Guardian of "the essential grandeur of this project we call the European Union, where nations born in so much blood work together freely in a commonwealth of democracies." He is right, but his argument actually works against the Lisbon Treaty, or at least the current ratification process, which excludes the people forced to live under the resulting government. Declares Roger Cole: "This referendum is not an Irish battle. It is a European battle fought on Irish soil, a battle between the peoples of Europe that support democracy and the elite of Europe that want an empire."

The poverty of those years caused many to emigrate from the country, mostly to the U.S. Upper Midwest. Beginning in the 1870s, Sweden created the conditions for developing a high-growth, free-market economy with a slowly growing government sector. As a result, Sweden for many years had the world's fastest-growing economy, ultimately producing the third-highest per capita income, almost equaling that in the United States by the late 1960s. Sweden became a rich country before becoming a welfare state.

Sweden began its movement toward a welfare state in the 1960s, when its government sector was about equal to that in the United States. However, by the late 1980s, government spending grew from 30 percent of gross domestic product to more than 60 percent of GDP.

Most full-time employees faced marginal tax rates of 65 percent to 75 percent, as contrasted with 40 percent in 1960. Labor-market regulations were introduced to make it very difficult to fire workers. Business profits were taxed heavily, and financial markets were regulated heavily. By 1993, the government budget deficit was 13 percent of GDP and total government debt was about 71 percent of GDP, which led to a rapid fall in the value of the currency and a rise in inflation.

These policies and outcomes greatly diminished the incentives to work, save and invest. Economic growth slowed to a crawl. Other countries that avoided the excess spending, taxing and regulation of Sweden grew more rapidly, leaving Sweden in the dust. Sweden is still a prosperous country, but far from the top, and its per capita income has fallen to just about 80 percent of that in the United States.

In the late 1980s and 1990s, Sweden began an economic course correction that continues today. Marginal tax rates were reduced for most of the population, and this trend is expected to continue.

The wealth tax and inheritance tax were abolished. Financial markets, telecommunications, electricity, road transport, taxis and other activities were deregulated. Privatization of industry was begun, and the current government is continuing the process. The generosity of some welfare and other benefits has been reduced, with the goal of making work more economically rewarding relative to government benefits. Also, trade liberalization has been expanded greatly. The result has been a pickup in economic growth, and Sweden is no longer falling further behind other developed countries.

One notable success has been pension reform. Sweden was the first nation to implement a mandatory government retirement system for all its citizens. Sweden, like the United States and most other countries, was faced with an increasing, unfunded social security liability as a result of low birthrates and people living much longer. After studying the problem in the early 1990s, the Swedes approved, in 1998, moving toward a Chilean private pension system, first developed by former Chilean Labor Minister Jose Pinera. (Seventeen countries have adopted variations of the Pinerian system, which has been very successful in Chile.)

The new Swedish pension system has four key features, including partial privatization, individual accounts, a safety net to protect the poor and a transition to protect retirees and older workers. The benefits have been substantial budgetary savings, higher retirement income and faster economic growth.

Those who wish to chase the Swedish model need first to decide which model they seek: The high-growth, pre-1960 model; the low-growth model of the 1970s and 1980s; or the reformist, welfare-state model of recent years. The irony is that the current Democratic Congress and administration are rapidly emulating the parts of the Swedish model that proved disastrous and rejecting those parts that are proving to be successful.

Most Swedes now understand that they still have a good distance to go to further strengthen the market economy to ensure continued growth. Thus, they continue to move toward reducing the size of government rather than increasing it.

If the Obama Democrats were wise enough to learn from the Swedes, they would be moving toward trade liberalization rather than away from it. They would be moving to at least partially privatize Social Security. They would not seek to prevent the abolition of the death tax. They would be reducing rather than increasing regulations. They would be reducing rather than trying to increase marginal tax rates on work, saving and investment. They would be reducing the corporate income tax as was done in Sweden.

Finally, the Obama Democrats would be reducing government spending rather than increasing it and not running deficits as large as those that almost sank the Swedish economy 16 years ago.

In the midst of the worst crisis in half a century, it is easy to forget that the real problem is not the bust but what preceded it: a boom filled with bad investments.

The boom was a natural consequence of too much easy money for too long. That policy was itself a response to the bursting of the dotcom bubble, to which Alan Greenspan and the Federal Reserve responded by cutting interest rates from 6.5% to 1% – and keeping them that low for a whole year. The result was a market drowned in cheap money.

People could buy what they wanted, but, after the dotcom crash, they did not trust stocks or bonds, and so they turned to the safest bet: real estate. People could buy bigger and better without having to pay much; indeed, they could profit more by buying bigger and better. As more money entered the market housing prices in the US increased by 10%-15% per year. The effect was such that, even if you lost your job, you could take a second mortgage, because your primary property had increased in value.

At the same time, successive US governments did everything to promote home-ownership, even for those who could not afford it. Deductions, subsidies, insurances and trillion dollar commitments from government-sponsored companies like Fannie Mae and Freddie Mac undermined underwriting standards. Wall Street then put the whole sub-prime mortgage process on speed by securitising mortgages and so passing them on to someone else.

By the end, too much wealth had ended up in investments that were worth much less than we thought. The banks and financial companies that financed those investments have made gigantic losses.

There now seems to be a consensus that with this crisis as the result of too low interest rates, too much borrowing and too many bad investments. So it is ironic that central banks and governments in Europe are trying to meet the crisis with even lower interest rates, even more borrowing and with attempts to subsidise and protect bad investments and overproduction – in the housing sector, the car industry and everything in between.

Worse than the irony, of course, is the danger that now – just as in 2001 — central banks are responding to one bubble by inflating a new one.

Again, the bubble is being filled with bad investments. A recession is a time when we should sort out bad investments and transfer capital and labour from failed sectors into more competitive industries. Instead, it seems as if European politicians would like to keep failed investments on life support until economic growth makes it possible for them to survive on their own. The result may be a delayed return to healthy economic growth.

Moreover, European leaders appear not to have understood that government failures contributed to the crisis, not just market failures. A failing that the markets and governments shared in was the creation of a monoculture. Banks did so by using the same standards and computer models; governments did so by harmonising regulation.

There was one part of the market that both speculated against the housing bubble and contributed liquidity when the markets froze in the autumn of 2008. That part was made up of hedge funds — and one reason why it bucked the trends was that they did not face the same regulation and capital requirements as others. When regulation failed uniformly everywhere else, this unregulated part of the economy continued working.

And how have the European Commission, the EU, the US and the members of the G20 responded? By proposing strict regulation of hedge funds and making sure that they behave just like everybody else the next time around. Not because hedge funds contributed to the crisis, but only because the proposal has been in the works for a long time.

One virus came close to wiping out the financial system last September. Now our regulators seem determined to remove the last bit of diversity. Danger looms.

Russia has no obligation to bend one way or the other. The country still exerts strong influence over most Central Asian states, including those directly bordering Afghanistan. In fact, Russia recently allowed — after nearly eight years of war — the United States to use its airspace to transport troops and military equipment into Afghanistan. After Mr. Biden's comment, there appears to be a gap between the Obama administration's objective of stabilizing Afghanistan and the means with which they hope to achieve it. Gratuitously antagonizing Russia risks prompting officials in Moscow to either retract their concession on Afghanistan, to pressure Central Asian republics to act in kind — or both.

Currently, nearly 75 percent of U.S. and NATO supplies for troops in Afghanistan must travel through deteriorating security conditions in neighboring Pakistan. Therefore, Washington has begun to court Central Asian republics for alternative logistical routes into land-locked Afghanistan.

One corridor under consideration would start in Latvia, travel by rail through Russia, then to Kazakhstan and onward to Uzbekistan. Another would start in Georgia, sail by ferry across the Caspian Sea to Kazakhstan, travel by train and by truck, then split, either continuing through to Uzbekistan and then on to Afghanistan, or through Tajikistan and on to Afghanistan. But after Kyrgyzstan's government flirted with the idea of ending America's use of its Manas Air Base, following Russia's announcement of billions of dollars in new aid for the country, the message was loud and clear: Russia is an essential element in reaching Afghanistan.

Russia has over 20,000 military personnel in Tajikistan protecting the Tajik-Afghan border. Moscow also has operatives among the leaders of Afghanistan's Tajik-dominated Northern Alliance, the ethnic Uzbek party Junbish-i-Milli-Islami, and even in the Afghan government itself, such as Afghan defense minister, Mohammad Qasim Fahim, a Soviet-trained intelligence officer, military leader of the Northern Alliance, and one of President Hamid Karzai's two vice-presidential candidates in the August 2009 elections. Moreover, Afghan tribal chief, Ajmal Khan Zazai, argues that America's cooling ties with Karzai have pushed him into Russia's arms.

Shortly after 9/11, Glen Howard, an analyst who specializes in Caspian defense and security issues, said Russian efforts to bestow legitimacy and act as regional patron to Afghanistan's ethnic minorities, principally those in the Northern Alliance, was Moscow's attempt to preserve its position in Afghanistan following the defeat of the Taliban. "It is becoming increasingly evident," Howard said, "that if matters continue to develop in the current direction, the real winner in Afghanistan will not only be the Northern Alliance, but also Russia."

In addition to Russian dominance in Central Asia, it also has influence in the Persian Gulf, specifically with Iran. Russia, a veto-wielding member of the U.N. Security Council, has helped Iran construct its first nuclear power plant at Bushehr. Given America's frosty relations with the Islamic Republic, Moscow is one of the few great powers with leverage over Tehran and its nuclear program.

Earlier this month, President Obama and his Russian counterpart, Dmitry Medvedev, signed a deal to allow the United States to use Russian airspace to transport troops and lethal military equipment into Afghanistan. But if Washington is serious about stabilizing Afghanistan and working collaboratively — rather than unilaterally — in limiting the spread of nuclear weapons to rogue regimes, Obama cannot afford his second in command making unpredictable and disparaging remarks.

Even as they criticized the George W. Bush administration for invading Iraq, leading liberals defended Clinton administration war-making in the Balkans. Sharply challenging this positive assessment is David Gibbs of the University of Arizona. A man of the left, Mr. Gibbs nonetheless disputes the nostrums of so-called humanitarian intervention. His assertions are contentious but well-supported. Attacking Serbia turned out to be neither humanitarian nor prudent.

Perhaps Mr. Gibbs' most controversial assertion is that "the containment of allies remained a major US objective" behind Washington's Balkan policy. Mr. Gibbs too quickly dismisses the professed humanitarian objectives of allied officials — Secretary of State Madeleine K. Albright may really have seen Yugoslav President Slobodan Milosevic as Hitler reincarnated. Nevertheless, Mr. Gibbs offers an important antidote to the self-serving propaganda emanating from Washington and allied capitals.

Mr. Gibbs' most important success is demonstrating the enormous complexity of the multiple Balkan conflicts. The bloody disintegration of Yugoslavia involved a catastrophic mix of murderous local factions, brutal regional players and foolish Western decisions. Shamefully and tragically, U.S. policy consistently delayed peace and intensified conflict.

"First Do No Harm" highlights the many inconvenient truths of the Balkan imbroglio. For instance, Berlin lit the fuse for the Yugoslav explosion by backing Croatian and Slovenian independence without insisting upon protections for ethnic minorities — most importantly Croatian Serbs. Writes Mr. Gibbs: "In retrospect, Germany's actions contained a heavy element of miscalculation and showed a tendency to underestimate the destructive consequences that the intervention might have."

Even more shocking was Washington's coldblooded and counterproductive Realpolitik strategy of targeting only the Serbs. Notes Mr. Gibbs: "Franjo Tudjman was just as racist and aggressive as Milosevic; the persecution of ethnic Serbs in Croatia was just as morally objectionable as the Serb-perpetrated atrocities in Kosovo." Little better were the Bosnian Muslims. Mr. Gibbs explains: "It is true that the Muslim soldiers engaged in significantly fewer atrocities than did their Serb counterparts, but this was because the Muslims had inferior weapons, not because of any basic moral difference between the two sides."

Whether operating from a cynical desire to ensure America's dominant role or a naive hope to forge a better settlement, Washington torpedoed proposed settlements. In early-1992, European mediation led to the Lisbon agreement, an untidy compromise among Croats, Muslims and Serbs in Bosnia. At Washington's instigation, the Croats and Muslims reneged "and full-scale war commenced within two weeks," Mr. Gibbs writes. Peaceful implementation was never assured, but had the agreement held, years of conflict — and tens of thousands of deaths — would have been avoided.

The Clinton administration followed suit when it blocked the so-called Vance-Owen plan. Notes Mr. Gibbs: "The US role was especially unfortunate, since a full peace accord might have been feasible at this point."

Clinton officials also encouraged Operation Storm, Croatia's brutal assault on the Krajina Serbs. Promoting ethnic cleansing made a mockery of the Clinton administration's humanitarian pretensions. Notes Mr. Gibbs: "The Croatian atrocities embarrassed the United States, and some figures sought to distance themselves from the whole operation, at least in public." Others, however, rationalized Croatian atrocities.

Mr. Gibbs never sugarcoats Serbian misbehavior. But here, too, there was "an element of moral complexity," he explains. Regarding Kosovo, the tendency was to emphasize Serbian brutality, but "such perspectives ignore the history of Albanian provocations against Serbs that preceded the repression of 1989. The imposition of martial law followed years of oppression orchestrated primarily by the Albanians, with Serbs as victims," he explains.

Moreover, the Kosovo Liberation Army engaged in brutal attacks designed to provoke Serbian retaliation. U.S. and European officials even termed the KLA a "terrorist organization" — until the Clinton administration decided to dismember Serbia. As part of its strategy, Washington attempted to impose an agreement at the conference in Rambouillet, France, which would have treated all of Serbia as a conquered nation. Europeans admitted that the agreement was designed for failure; Henry Kissinger called it "a terrible diplomatic document that should never have been presented in that form."

Did Rambouillet result from incompetence or the desire to create a pretext for war? Mr. Gibbs leans toward the latter. In either case, Washington again hindered the peaceful resolution of a Balkan conflict.

The Clinton administration assumed that a short bombing campaign would force Serbian acquiescence. The Milosevic government instead responded by expelling hundreds of thousands of ethnic Albanians — a war crime, but one for which the administration shared responsibility. Once the fighting concluded, allied forces did little to stop ethnic Albanian brutality, which resulted in hundreds of deaths and the expulsion of a quarter million Serbs and other religious and ethnic minorities.

Mr. Gibbs' conclusions undoubtedly will provoke sharp disagreement, but "First Do No Harm" is a tour de force. He convincingly debunks Washington's claim of humanitarian intervention:

"It ignores the fact that the Western states helped provoke the war in 1991. And the US role in repeatedly blocking peace agreements that might have ended atrocities without military intervention seems inconsistent with any humanitarian motivation. These actions were certainly helpful in affirming the hegemonic role of the United States, and thus in advancing US interests. But they cannot be defended on moral grounds."

Mr. Gibbs concludes his invaluable book with a pessimistic assessment of humanitarian intervention more broadly. Look at Afghanistan, Haiti, Iraq, Somalia and the Balkans. "On what grounds should we assume that intervention will improve humanitarian conditions in the target country, rather than exacerbate them?" he asks. Washington needs to answer that question before undertaking another war allegedly on humanitarian grounds.

Just what, if anything, does Latvia today have in common with Argentina in 2001? On the surface, it appears that Latvia is employing the same type of exchange-rate system as did Argentina. Latvia's currency trades in a narrow band of plus or minus 1% around a peg of 0.7028 lats per euro. In 2001, the Argentine peso was linked to the U.S. dollar at one to one. But the similarities stop there.

Latvia and its Baltic neighbors have been models of fiscal prudence (see Tables 1 and 2). Before last year, when the recession began, all had low budget deficits or even budget surpluses. They have shown willingness to make tough cuts in government spending. They also have ratios of debt to GDP that remain quite low by international standards. Argentina, in contrast, had persistent problems with cutting spending and had a much higher debt to GDP ratio.

In the monetary sphere, there is a straightforward way to determine whether a monetary authority that links its currency to another is in danger of breaking the link: compare it to an "automatic" system. The most automatic system is a currency board, which issues money convertible on demand into a foreign anchor currency at a fixed rate of exchange. As reserves, a currency board holds foreign assets equal to 100% or slightly more of the monetary base (its note, coin, and deposit liabilities).

These characteristics ensure that the quantity of domestic currency in circulation is determined solely by market demand for domestic currency. They imply that for a currency board, net foreign reserves (foreign assets minus foreign liabilities) should be close to 100% of the monetary base. Moreover, "reserve pass-through" (the change in the monetary base divided by the change in net foreign reserves over the period in question) should also be close to 100%.

During the three years before Argentina's currency crisis of December 2001-January 2002, Argentina's monetary system, often mistakenly termed a currency board, was not operating in "automatic" fashion. Its reserve pass-through was not even close to 100%, and after mid 2001, its net foreign reserves as a percentage of its monetary base fell well below 100% (see Chart 1). By comparison, Latvia's monetary system — even though not legally a currency board system — is operating largely as though it were one. In consequence, Latvia could convert its entire monetary base into euros at the current exchange rate. The same can be said of Estonia and Lithuania — two countries that officially adopted modified currency board systems in 1992 and 1994, respectively.

The data speak clearly. Latvia and its Baltic neighbors are not repeats of Argentina. Their economies have suffered greatly from a sudden stop of foreign investment and from recession in Western Europe, but they retain ample foreign reserves.

They would do better to officially adopt the euro, even without the blessing of the European Central Bank, than to devalue their national currencies.

Throughout history, Great Britain has been America's closest military partner. The government recently announced a review of British defense policy, shortly after the Institute for Public Policy Research predicted significant cuts in London's defense budget of roughly $54 billion.

One potential target is the planned $124 billion replacement program for Britain's sea-based Trident nuclear-missile program. Earlier this year three top retired military officers proposed dropping Britain's independent nuclear deterrent. Prime Minister Gordon Brown has suggested reducing British nuclear weapons as part of international negotiations.

Also under scrutiny is London's contribution to the Afghanistan war. Rising casualties are taxing public patience. The economic crisis is increasing calls for cutbacks. The Royal United Services Institute recently proposed "a radical scaling back" of the British contingent. Britain can, explained the Institute:

plausibly argue it is contributing much more than any other US ally to the Afghanistan operation. Given this, the US 'surge' into Helmand and Kandahar provinces could be used to relieve the pressure for further increases in the UK's own forces.

Prime Minister Brown has resolved "to complete the work that we have started in Afghanistan and Pakistan." However, with elections due by mid-2010, even Brown's Labour Party might feel forced to retreat. In any case, the opposition Conservatives are likely to take power next year and what would happen then is unclear. One Tory MP says: "The death toll means we should do it properly or we shouldn't to it all."

The Financial Times reports that:

An increasingly heated British debate about its role in Afghanistan has sparked concern in Washington about the sustainability of the military strategy and the US public's own willingness to commit troops for the long term, senior officials and analysts say.

American officials say they wouldn't be surprised at such controversy in Germany, but Great Britain is different. Bruce Riedel, a Brookings Institute scholar who ran the Obama administration's review of Afghanistan policy, admitted: "The British are crucial to the NATO mission in Afghanistan" and that U.S. "public opinion will be affected negatively against the war if our key ally in Helmand starts to look for a path out."

A British withdrawal would be particularly bad news for Washington, since Britain is one of the few countries providing meaningful assistance in Afghanistan. Although many NATO members have contributed forces, only Britain, Canada and the Netherlands have not added "caveats" restricting the use of their contingents. Even under U.S. pressure, it took eighteen months to negotiate the total number of caveats down from eighty-three to seventy. Complains General John Craddock, the outgoing NATO SACEUR, or supreme commander in Europe: "There are restrictions at every level." No wonder American personnel joke that ISAF, officially the International Security Assistance Force, really stands for "I saw Americans fight."

Germany is one of the worst. It has insisted on sending its troops to the relatively secure north, in order to keep them out of combat. Reports the London Times: "Now Germany's battered military reputation has received a further humiliating blow. According to official reports the three thousand five hundred troops in northern Afghanistan drink too much and are too fat to fight." We can all be happy that Berlin's war-mongering past is over, but it is unfortunate that Europe's most populous and prosperous nation is unwilling to do more to promote international security.

None of this is likely to change, whether or not Irish voters ratify the Lisbon Treaty in October. "Old" Europe has pretensions of global leadership but is unwilling to devote the resources necessary to create a corresponding continental military. Most Europeans see no threats to justify such expenditures. "New" Europe is more concerned about military issues, principally containing Russia, but lacks the capacity to make a significant military contribution. Incorporating countries like Albania and Croatia has turned NATO expansion into a farce.

But both parts of Europe have one thing in common: They continue to look to the United States for a de facto bailout.

Washington's policy inevitably encourages European dependency. American officials have resisted creation of an independent continental military out of fear that it would encourage the Europeans to act separately from the United States. Washington typically offers verbal support for strengthening EU capabilities, but in practice expects any increase to be put to American ends. Some analysts fear any growth of European autonomy. For instance, Sally McNamara of the Heritage Foundation criticizes Ivo Daalder, America's new ambassador to NATO, for advocating a "Europe-first policy" which

would essentially create a back door for America's withdrawal from the European continent in figurative, and possibly, real terms. Neither the EU nor any single European nation is capable of stepping into the breach this withdrawal would create, leaving a dangerous power vacuum with unpredictable outcomes.

It's hard to imagine Daadler, who is well within the policy mainstream, pushing America's withdrawal from Europe, but Representatives Michael Turner and Jim Marshall appear to fear an imminent American retreat from the continent. They have introduced the NATO First Act, which would attempt to make permanent America's existing base structure across Europe. Although the secretary of defense could close a facility after determining that it was unnecessary (why else would he shut down a base?), he would have to report to Congress on the impact on NATO's Article V guarantee to the other twenty-seven alliance members.

The bill also would increase money for NATO members, further subsidize alliance applicants, fund missile defense and ban any reduction in nuclear forces in order to maintain extended deterrence. McNamara advocates going even further, having Congress "insert a one year's notification requirement for any base closure, troop withdrawals, or changes to U.S. forward-deployed nuclear forces," allowing legislators to block any adjustment to American military deployments.

Although Turner and Marshall want to put NATO first, Washington's principal goal should be protecting America, not Europe. True, the press release advancing the bill declared:

By building a robust, integrated U.S. and allied security framework in Europe, the NATO First Act will bolster common defenses, protect the United States homeland, and strengthen an alliance that has ensured peace and stability in Europe for over 60 years.

That all sounds nice, but NATO has little to do with America's defense these days. America protects Europe against largely phantom threats. European states play act as a global power while starving their militaries in order to maintain generous welfare states. The Europeans won't even do more to protect the eastern reaches of their own continent. Washington is supposed to do all the heavy lifting. Europe apparently believes its job is to help "supervise." Nothing will change until the U.S. stops allowing Europeans to enjoy a cheap if not quite free ride.

During the cold war America could ill afford to allow the Soviet Union to dominate Europe. NATO had a clear mission that warranted Washington's promise to go to war. Two decades ago aggressive, hegemonic communism disappeared as an international force. The principal purpose of the transatlantic alliance also disappeared.

No adequate substitute mission has emerged. McNamara contends that "Europe is not a sea of tranquility and faces geopolitical and asymmetric challenges, including a resurgent Russia, missile proliferation, and Islamist extremism." However, none of these offers anything akin to the Red Army backed by a huge nuclear missile arsenal poised along the Iron Curtain with the seeming threat to sweep to the Atlantic.

Moreover, McNamara ignores Europe's capabilities. The European Union's GDP is bigger than America's and exceeds Russia's by a factor of ten. Why Americans should continue subsidizing the defense of their richer trans-Atlantic neighbors is difficult to understand. After spending sixty years enjoying a cheap ride courtesy of Washington, it would seem fairer for Europe to start subsidizing America's defense.

Missile proliferation is a problem, but one that warrants cooperation rather than alliance commitments. The Europeans should decide on the defenses they desire and pay accordingly. There is no cause for the United States to lobby the continent to defend itself, offering financial benefits or additional security guarantees to win the Europeans' cooperation. Especially when Europe continues to presume that it enjoys the protection of America's nuclear umbrella, the continent should pay for its own missile defense.

As for Islamic extremism, there is precious little that a military alliance can do. Is anyone contemplating NATO air strikes against Paris suburbs dominated by Muslim immigrants from North Africa? The challenge facing Europe grows out of large-scale Islamic immigration mixed with limited social integration. On these issues America can't even offer good advice, since it has little relevant experience. There is much to be gained from cooperation against extremism and terrorism, but that cooperation would continue irrespective of the status of NATO.

While Nicolas Sarkozy wants a bigger European military to turn the continent into a Weltmacht of sorts, there is little popular support for any kind of military buildup. Europeans perceive few serious security threats and have even less interest in backing Washington's active global agenda. As a result, analysts like McNamara might dream of NATO as "an intergovernmental values-based alliance" that offers "America additional security options" and which operates "successfully in non-NATO theaters of war, such as Iraq." But such a program exists only in the realm of fantasy. Just look at NATO in Afghanistan to see what out-of-area transatlantic cooperation means in the best case.

Robert Kagan of the Carnegie Endowment for International Peace also believes in a faith-based foreign policy. He makes the astonishing claim that slowing America's increase in military spending—up three-quarters after inflation since 2001—

would make it harder to press allies to do more. The Obama administration rightly plans to encourage European allies to increase defense capabilities so they can more equitably share the burden of global commitments. This will be a tough sell if the United States is cutting its own defense budget.

Kagan must be an incurable optimist. The Europeans resisted U.S. pressure to expand their defense capabilities even during the cold war and routinely violated specific pledges to increase military outlays. British Defense Secretary John Hutton has spoken of "A legacy of underinvestment by some European member states in their armed forces, significant variance in political commitment to the campaign, and underneath it all a continued overreliance on the U.S. to do the heavy lifting." As long as America does, the Europeans will not do.

The worst idea is to foster continued enlargement of the alliance, which the "NATO First Act" would do by subsidizing countries that want to join. NATO may be the first club which pays people to apply rather than vice versa. Most arguments for doing so have essentially nothing to do with augmenting U.S. security.

For instance, McNamara writes of "America's long-standing bipartisan policy of promoting the democratization and integration of former Soviet satellite countries into the Euro-Atlantic community." That's a worthy objective, but democratic integration is something far more appropriate for the European Union.

In her view this process advances American security by "increasing the number of partners and their capacity and abilities to partner with NATO on alliance missions such as Kosovo and Afghanistan." However, the former, undertaken in a region of no strategic interest to the United States, was of no security benefit to America. Indeed, Washington's attempt to dictate boundaries in the Balkans has created greater regional instability, made Washington directly responsible for human rights abuses against ethnic Serbs, and soured relations with Russia.

In Afghanistan (and Iraq) the military value of the limited contributions—ranging from a couple score, such as from Estonia, to a couple thousand, such as from Georgia—of the new and potential new members of NATO has been negligible, and no where worth the cost of all the aid pumped into those same nations. McNamara also writes of "building interpersonal relationships between the militaries and commanders of partner countries," as if Washington had much to gain from such relationships with countries that possess far more potential adversaries than military resources.

In any case, even the most fantastic claims of security benefits come in well below the cost and risk of guaranteeing the security of politically unstable, economically weak, and strategically vulnerable states. Even a science fiction writer would have trouble concocting a scenario under which the United States would be vitally affected by a contingency involving Albania, Macedonia, Bulgaria or Georgia, to name a few new NATO members or aspirants.

There obviously are reasons to wish them well, but it cannot be America's purpose—assuming preserving U.S. security remains the American government's most important duty—to willy-nilly promise to defend everyone from everyone, especially from a nuclear-armed power like Russia. That small nations next to a larger state ready to play the bully desire protection is understandable. But that does not warrant America risking war.

Indeed, irrespective of NATO membership, it is hard to imagine France, Germany and Italy, in particular, declaring war on Russia to save Estonia or Georgia. As "Old Europe" has seen NATO expansion prepare to incorporate countries seriously at odds with Moscow, enthusiasm for enlarging the alliance has flagged. Even if Washington is able to force the accession of Georgia and Ukraine, America's most important allies are likely to prove no more enthusiastic in backing up the new commitments in the event of a crisis. Fighting with recalcitrant allies would be almost as bad as fighting without allies.

Some enlargement advocates assume that Washington need only whisper its support to a friendly state and potential adversaries will assume the fetal position. If only that were true. But the United States is not the only nation that is concerned with security, worries about its borders, and is willing to use force to advance its interests. Nor is America the only country with nuclear weapons. Advocates of American military intervention endlessly denounce the slightest hesitation to intervene and threaten war as "appeasement." Facing aggressively expansionistic U.S. policy, Russian policymakers are likely to speak in similar terms when dealing with Washington. And if it comes to securing the border, they may not back down.

It is hard to know what Europe will become. McNamara is right to point to "the European project's serious lack of legitimacy and credibility."

Attempting to force through continental in Brussels by preventing everyone except the Irish from voting—and forcing the Irish to continue voting until they say yes—is not likely to yield anything equivalent to a real country. For the very same reason, however, McNamara need not worry about the EU being "a counterweight in the making." Europe does not speak with one voice, and is unlikely to do so in the foreseeable future; it almost certainly will not have a military commensurate with its economic influence for an even longer time.

If Europe is to play a more important security role, something in America's and Europe's interests, it will do so only because of necessity. That is, the Europeans will not do more until Americans do less. Even then Europe might not rally behind the vision of Nicolas Sarkozy and others of turning the continent into a global power. There is, however, no chance of them much of anything serious until Washington stops subsidizing their security dependence.

CED: Recently, the World Bank revealed that Bulgaria and Latvia held insufficient international reserves to cover their short-term debt payments for 2009. Did the currency board arrangements used by these countries make them particularly vulnerable to failure to service future debt obligations?

Hanke: Latvia's central bank has at times behaved as a currency board, but the country has never officially adopted a currency board system. In consequence, its currency has been more vulnerable to attack than the currencies of its neighbors Estonia and Lithuania; both of them employ currency board-like systems.

A currency board is an institution for assuring the stability of the exchange rate and the convertibility of the currency (specifically, the monetary base). It is not part of the job of a currency board to accumulate foreign reserves against short-term debt. The public and private debtors themselves are responsible for accumulating foreign assets, or domestic assets, that they can exchange for foreign currency.

CED: How have fixed exchange rate regimes in Latvia and Lithuania contributed to a lack of fiscal discipline?

Hanke: The government debt of the Baltic countries was low by world standards before the crisis and remains so today. And only Latvia has borrowed from the IMF thus far. It should be stressed that currency boards (and other fixed exchange-rate regimes) provide hard budget constraints that tend to contain fiscal deficits and the level of public debt.

The growth of indebtedness in the Baltic States was mainly a private-sector phenomenon, based on optimism about the Baltics' ability to converge to Western European standards of productivity. The crisis revealed that the rise in investment had jumped too far ahead of the prospective increases in productivity, and that real estate prices, in particular, were too "high."

CED: If Latvia, Bulgaria or Hungary were allowed immediate euro entry, would it help or hinder recovery efforts in Central Europe and the Eurozone?

Hanke: Bulgaria, Estonia, and Lithuania are in a different position from other Central and Eastern European countries because they have currency board-like systems that maintain rigid exchange rates with the euro and sufficient reserves to immediately convert the entire monetary base into euros. I have already mentioned that Latvia has a central bank that has sometimes behaved like a currency board but has never officially been one. Other Central and Eastern European countries have central banks with monetary policies more typical of central banks.

Whatever their monetary policies are, all the countries of the region that wanted to join the European Central Bank immediately would benefit if they could do so. The main benefit would be lower real interest rates resulting from eliminating fear of devaluation. There would be no effect on the ECB's ability to run a low-inflation monetary policy.

CED: Does Montenegro's successful "euro-ization" suggest a need for revision of the EU's convergence criteria, particularly the need for Exchange Rate Mechanism (ERM II)?

Hanke: Definitely. For countries that already have fixed exchange rates with the euro, it is illogical to impose an additional inflation criterion, because under a fixed exchange rate, the rate of inflation is the result of the market decisions of individuals rather than a target that monetary policy can control.

CED: How has EU membership safeguarded Europe's transition economies against additional economic volatility? What are some best and worst practices that the region can learn from other major currency crises?

Hanke: I do not think EU membership has made much difference, given the slow response of the Western EU members and their insistence on slowing Eastern Europe's admission to the EMU and the ECB. The wisest course of action for each country is to unilaterally do what is in its best interest. In this sphere, the most courageous and wise decision was taken [by Montenegro] in late 1999 by former President and current Prime Minister Milo Djukanovic (whom I was advising at the time) when he dumped the Yugoslav dinar and replaced it with the German mark. The mark morphed into the euro, and now Montenegrins use the euro. Indeed, this currency shift was a linchpin in Montenegro's drive for independence in June 2006, an event followed in April of this year by the approval of Montenegro's candidacy for EU membership. It's a lesson for other countries wanting to euroize. The key is to limit the role of domestic currencies while facilitating euro use.

Panama has successfully followed this strategy for a century. Most people doing business and banking in Panama think the U.S. dollar is Panama's national currency. But it's not. Panama's currency is the balboa. One balboa is equal to one dollar. And while Panama issues balboa-denominated coins, it does not issue paper money. Thus Panamanians break out balboas only for small transactions requiring coins. The greenback is used for everything else.