Niall Ferguson, author and professor at New York University's Stern School of Business, delivered the seventh of the 2003-2004 Bradley Lectures on March 1. Edited excerpts follow.

The European Union is an entity on the brink of decline and dissolution. Europe will evolve not into a rival, competitor, or counterweight to the United States, but into its antithesis, which draws political energies inward and is colonized by exogenous forces.

Economic Underperformance

Many of the apparent signs of rapid integration and of parity with the United States are false. In every year of the last decade but one, the economy of the United States has grown in real terms faster than that of the European Union. In every year of the last eight years but one, productivity has grown faster in the United States than in Europe. On average over the last decade, unemployment in the European Union has been nearly double what it has been in the United States.

Economic underperformance in Europe is principally, or at least predominantly, a German story. It is richly ironic that only twenty years ago scholars were warning that Germany was going to supersede the United States itself as one of the great economic powers, along with Japan. In truth, those of us in Germany in the 1980s could see an impending economic crisis in that country, a crisis that German reunification temporarily postponed in an orgy of deficit finance and government contracts. The German economy is harmed by the fact that interest rates are probably around one hundred basis points higher than they should be. Given that the German economy is roughly one-third of the euro zone's economy, an unhealthy Germany is an unhealthy European economy.

If you add up all the unrequited transfers that Germany has paid through the European budget since its inception, the total exceeds the amount that Germany was asked to pay in reparations after World War I. This finding explains why surveys show that a real discrepancy exists between what people think about the European Union relative to the general good and what they think about the European Union relative to their own national good. Countries that are net gainers and recipients from the European budget think that the European Union is quite good, but even better for their own country. Countries that are net donors to the European budget think that the European Union is okay for their country but is very good generally.

Although the German economy is very large, it is far from clear, when it has not grown at all in the past six quarters, why the German economy should continue to subsidize the economies of the smaller, poorer countries of Southern and now also Central Europe.

Senescence and Immigration

The fundamental problem that Europe faces is senescence. By the year 2050, which is less remote than it may sound, current projections by the United Nations suggest that the median age of the current fifteen European Union countries will rise from thirty-eight to forty-nine.

Over the same period, the German population will decline--absolutely, not in relative terms--from 82 to 67 million. Falling populations will characterize the hitherto dominant societies of Western Europe. An increase in retirement ages would not suffice to alter the problems that will beset the social security systems of Western Europe. Immigration is the only way out for that continent. Europe holds an obvious source of youthful workers who aspire to nothing more than a better standard of living. All around Europe are countries whose birth rate is more than twice the European average.

The trouble is that nearly all these countries are predominantly Muslim. Not only that, but there is a country that now has a very plausible claim to European Union membership: Turkey.
The arguments against Turkish membership--and the Turks have been pressing for some form of membership since the 1980s--are getting weaker and weaker. The only argument left is that fundamentally Europe is a Christian entity. Its cultural roots are different from those of Ottoman Turkey, and Europe is a latter day secular version of Christendom.

The reality is--and it is perhaps the most striking cultural phenomenon of our times--that Western and Eastern Europe are no longer in any meaningful sense Christian societies. They are quite clearly post-Christian societies. In the Netherlands, Britain, Germany, Sweden, and Denmark, fewer than one in ten people attend church even once a month. The reality is that

Europeans inhabit a post-Christian society that is economically, demographically, and culturally decadent. Europe can-not resist forever the migration that must inevitably occur from the south and from the east. Indeed, they try even now to resist the migration that really ought legally to be permissible from the new member states to the old member states after ten more countries join the European Union on May 1.

Increasingly, European politics is dominated by a kind of dance of death as politicians and voters try desperately and vainly to prop up the moribund welfare states of the post-Second World War era, but above all to prop up what little remains of their traditional cultures.