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Brexit, The End Of European "Soft Power"

Europe has seen its relative economic and military power decline for decades, but its "soft power" has held strong. But even that is now at risk.

Eager to leave
Eager to leave
Nando Sommerfeldt and Holger Zschäpitz

BERLIN — We would probably have been content with the status quo here in the Old World. The U.S. and China are by now, economically speaking, significantly superior to us. They also play in a different league on the military front.

All of this could be borne with magnanimity, seeing as the Old World has something in abundance that no other region on the planet has to offer, namely its good reputation. Even as the hard numbers, such as GDP, may be trending in the wrong direction, Europe is still a force to be reckoned with in "soft power."

It is known for its sound educational systems and extremely well developed democratic structures. The entire European Union even won the Nobel Peace Prize four years ago. Its cultural and societal norms are its highly regarded calling card. The entire world still remembers the World Cup that took place in Germany a decade ago, when visitors experienced our German hospitality and friendship.

But what now? Now, Europe is in the process of losing its good reputation. Soccer fans gathering in France these days are showing their ugliest of faces in the Euro 2016 competition. The law enforcement authorities seem to be overtaxed and the world watches in horror as the ugly scenes in Lille and Marseille are broadcast.

But it goes far beyond one sporting event, of course. The continent in general seems to be as divided as never before, as the advance of populist on both the left and right appears to be unstoppable.

Historian Timothy Garton Ash warned of a return of the dark days of the Old World, of a "relapsing into European barbarism," as he recently told the Financial Times.

Proof of the changing winds come in a survey this month by the Pew Research Center, according to which two-thirds of French people hold a negative opinion of the European Union. The French, according to Pew, even outdo the British in their EU pessimism, even as the UK is set to decide this week whether or not they will remain a member of the Union.

The Old World is losing its "soft power," its positive radiance and magnetism, as the support for the so-called "Brexit" becomes the symbol for the fear and rampant populism across the continent.

One last chance

The Portland think tank's "Soft Power Index" this year also found signs of Europe's slide. The U.S. has replaced Britain at the top and Germany has fallen from second to third place. And Canada bumped France down to fifth place.

It was the historian Joseph Nye who developed the "soft power" concept in the early 1990s, showing how nations are able to exert their power beyond their own borders without the use of tanks.

Soft power can be accumulated through a positive image, high standards of living and a kind of cultural magnetism. In the face of fierce global competition, a country can attract talented people on the international job market if it seems likeable, stable and trustworthy. Here in Germany, it was particularly important with the country's historical burden to be able to profit from these factors.

Jonathan McClory, author of the Portland study, says that "in addition to its leading role in foreign policy, Germany is mostly admired for its advanced products, its engineering and its economic system."

Moreover, Berlin's transformation from a divided capital city to a global center of creativity is something quite remarkable. Still, this year, Germany dropped from second to third-place in the Portland ratings. "The federal government has to get the refugee crisis under control," McClory notes. "The resulting increase in political support of right-wing groups is damaging Germany's soft power."

This year's leading country is the U.S., which jumped two places in the soft power ranking, with its leading role in technological innovation, digital development, global cultural goods and its world renowned universities.

No other country draws as many foreign students to its shores and most of the digital platforms and the mainstay of the digital avant-garde are of American origin. In fact, the ten largest companies registered at the stock market are American, among them the five technological giants Apple, Google, Microsoft, Amazon, and Facebook.

But the bloody assassination that took place last week in Orlando is just the kind of event that can undermine soft power. And then there is the rise of the likely Republican Presidential Candidate Donald Trump, whose threat to ban all Muslims from entering the U.S. and to build a wall at the Mexican border is harming America's reputation as an open-minded country.

Back in Europe, says McClory, "the possibility of a Brexit hangs above Britain's global status like a gigantic question mark."

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How A Xi Jinping Dinner In San Francisco May Have Sealed Mastercard's Arrival In China

The credit giant becomes only the second player after American Express to be allowed to set up a bank card-clearing RMB operation in mainland China.

Photo of a hand holding a phone displaying an Union Pay logo, with a Mastercard VISA logo in the background of the photo.

Mastercard has just been granted a bank card clearing license in China.

Liu Qianshan


It appears that one of the biggest beneficiaries from Chinese President Xi Jinping's visit to San Francisco was Mastercard.

The U.S. credit card giant has since secured eagerly anticipated approval to expand in China's massive financial sector, having finally obtained long sought approval from China's central bank and financial regulatory authorities to initiate a bank card business in China through its joint venture with its new Chinese partner.

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Through a joint venture in China between Mastercard and China's NetsUnion Clearing Corporation, dubbed Mastercard NUCC, it has officially entered mainland China as an RMB currency clearing organization. It's only the second foreign business of its kind to do so following American Express in 2020.

The Wall Street Journal has reported that the development is linked to Chinese President Xi Jinping's meeting on Nov. 15 with U.S. President Joe Biden in San Francisco, part of a two-day visit that also included dinner that Xi had with U.S. business executives.

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