Europe’s post-Cold War order is fraying and there’s no consensus over how to stitch it back together.

Some blame the European debt crisis for exposing the folly of the drive for economic unification. Some point to Vladimir Putin for redrawing the map by force and sending his warplanes to buzz NATO borders. For others, the vision of a peaceful, post-national Europe died off with the World War II generation.

The makers of European memory will ponder those questions this weekend, marking on Sunday the anniversary of the fall of the Berlin Wall in 1989 and the ensuing euro-euphoria. The lessons of the intervening quarter-century are more sobering.

“The easy assumption was that the international liberal order was prevailing,” said Nick Witney, a former head of the European Defence Agency, who is now with the European Council on Foreign Relations in London. “The fact is that those who don’t share those values are coming back. We’re not somehow riding the wheel of history any more than communism was.”

And:

Juncker’s mission as the EU’s top civil servant is primarily defensive. The turn-of-the-century notion that Europe could export its economic model to places like China, India and Latin America has given way to renewed global power politics with Europe’s heft much diminished.

“Europe has a number of forces that are fragmenting it right now,” said Christopher Chivvis, a European security analyst at the Rand Corp. in Washington. “To a certain degree, Putin increases the fragmentation. But I think that on the whole, especially as people in Europe absorb the reality of what’s happened in Ukraine, it’s going to tend to create a more unified European response.”

For now, however, Putinism isn’t without its apologists. Some architects of the new Europe have turned against their creation. The most notable is Viktor Orban, a leader of the anti-Soviet student movement in 1989 who, as prime minister of Hungary, now preaches the downfall of the liberal model he helped usher in.

Building what he calls an “illiberal state,” Orban has spoken admiringly of Putin and cut energy-supply deals with Russia in defiance of the EU. Orban’s party has rammed through a new constitution, curtailed the powers of the judiciary, clamped down on media and academic freedoms, and won another term this year in an election criticized by international observers.

In any case, there’s more than enough nationalism to go around in the European heartland. Parties with grievances against immigration, the euro, the EU and a sense of lost identity have made electoral inroads in Britain, France, Greece, Denmark, the Netherlands, Finland, Austria -- and even Germany, long seen as immune to bouts of populism.

“This is the worst possible time for geopolitical risk to be hitting the European continent,” Ian Bremmer, head of Eurasia Group, a New York-based risk consultancy, said this week on “Bloomberg Surveillance.” “On the one hand, you have an external environment that is much worse for the Europeans than anyone else. On the other hand, you have internal populism that’s going to make the Europeans grow farther apart.”

David Fuller's view

Europe’s initial post WW2 goal, long before it became the European Union, was noble – bring a permanent halt to European warfare.  The first achievement was an alliance of friendly nations, offering free trade and open borders for each others’ citizens.  However, this was not enough for politicians who went on to create the European Union and the Euro, as the first stage of building a Super State. 

Political egos were increasingly in charge and largely unchecked.  Convinced that they knew what was right, unelected bureaucrats became perennial leaders.  They were soon eroding democracy, shoehorning states into a single currency, promoting socialism for the masses, while building their own fiefdom in Brussels.  Their recruitment drive was based on infrastructure grants for poor states, encouraging them to join the EU.  This was financed by steadily raising taxes on successful citizens and member states, plus the new recruits as they recovered.

The tragic consequence is that EU economies have become serial underperformers, causing unemployment to soar and a brain drain to occur as talent leaves the region.  This has revived some of the ancient enmities and the original alliance of friendly nations is in serious danger of fracturing.

The EU is obviously not responsible for Vladimir Putin.  However, his actions have been emboldened by the EU’s weakness.  These two factors are destabilising for Eastern European countries.  No wonder stock markets in most of the European region are underperforming.