Why does the world today no longer see Europe as a model, as it seemed to do only a few years ago? It’s simple: The world can’t be expected to believe in a European model that Europeans don’t seem to believe in themselves.

What is the “European model?” It seems to consist of some combination of managed markets, state-dominated social welfare nets, political integration, economic union, state industrialism, and social postmodernism (including a heavy dose of secularism), yet with a high degree of moralism in the protection of human rights, civil liberties and the environment. At its peak, the global image of Europe was that of a peaceful, stable, prosperous and integrated political-economic space—a magnet for others that guaranteed a high quality of life and buffered its citizens against the worst effects of free-wheeling capitalism. The appeal of this model was manifested in the expansion of the European Union, whose accession process led country after country to endure painful reforms in order to become members of the club.

But what do we see in Europe today? Challenges across the board: economic, political, ideological, security.

On the economic side, the European model has proven not to be immune to the effects of the global financial crisis, and indeed has demonstrated its own self-generated unsustainability. While Europeans may still blame American “wild-west” capitalism for causing the crisis, the fact is that European banks were as leveraged or more so than American banks, and state budgets were as laden with deficits and debt as America’s, if not more so. More important, European financial woes are ultimately due more to underlying structural problems than they are to the ripple effects of the global financial crisis: an aging and declining population, unintegrated immigrant populations, expensive employer taxes and high social welfare costs.