THIS time next year, Americans will be voting in a presidential election. The Republican Party's effort to choose a candidate to take on Barack Obama increasingly resembles speed-dating, with party loyalists giving swift consideration to candidate after candidate, before getting restless and moving on to the next prospect.
There have been short flirtations with congresswoman Michelle Bachmann and governor Rick Perry, as well as with two candidates who coyly refused even to confirm their availability, Sarah Palin and Chris Christie. The latest speed-date is Herman Cain, who used to run a pizza chain and has a certain offbeat charm. But it looks increasingly as though the Republicans will end up going back to the first potential beau to present himself - the glossy, good-looking but strangely unappealing Mitt Romney.
Unlike Obama - or even George Bush - Romney does not inspire devotion in his followers. Nobody lies awake at night dreaming of a Mitt Romney presidency - with the possible exception of the man himself. The fact that Romney is a multimillionaire who made much of his money in private equity will make it hard for him to suggest he feels the voters' economic pain. Nonetheless, of all the Republican candidates, it is Romney the Obama administration most fears. Unlike the other main candidates, he cannot be convincingly painted as an extremist or an idiot. He would make a plausible president. And if the economy is really rocky next year, then that might be enough.
Obama has to overcome a daunting historical precedent. For the past 80 years, no US president has been re-elected when the unemployment rate was more than 7,2% . But the jobless rate in the US now stands at 9,1% . A broader measure - which includes those who cannot find full-time work or have given up looking - puts the rate at close to 17% . Last week, however, it was announced that the US economy is now growing at an annualised rate of 2,5% . During October the S&P 500 stock index staged its biggest monthly rally since 1974. If growth is sustained, markets rally and unemployment is clearly heading down in a year's time, it is still possible Obama could win re-election quite easily.
The biggest danger Obama faces is that a black economic cloud will drift across the Atlantic over the next year and explode over the US. The current US recovery is so fragile, Obama's advisers fear a sharp turn for the worse in Europe could quickly plunge the US economy back into trouble. It is hard enough for Obama to win re-election with unemployment higher than 9% . But if more than one in 10 Americans were officially out of work, he would be really struggling.
Despite the cries of triumph emanating from Brussels after last week's debt summit, it seems probable the crisis will flare up again. That Italy was unable to borrow on more favourable terms, even after the new deal, was a clear sign that market scepticism about Europe's ability to pay its debts has not dissipated. Europe's future, like its recent past, is likely to be about debt, bail-outs, fear and austerity. Chronic economic weakness inside the European Union would depress demand and confidence in the US . And if Europe's debt problems really escalated, to the stage where they provoked a new banking crisis and a double-dip recession, the odds could turn decisively against Obama.
The haunted demeanour of US Treasury Secretary Tim Geithner when discussing Europe - as well as the president's own signed piece for the Financial Times last week - suggest the Obama administration is keenly aware of the economic and political threat Europe poses. Obama could plausibly argue that a renewed crisis with its roots in Europe is hardly his fault. But such an argument would make him sound weak, or searching for excuses. His Republican opponent could simply pose the old question - are you better off now tha n you were four years ago? - and hoover up the votes of the majority of Americans who would reply "no". In fact, the Republicans are likely to go further than that. The party's leaders have long suggested, in various ways, there is something un-American about Obama. Romney, in particular, seems determined to portray the president as the standard bearer of an alien and unsuccessful European way of doing things. He recently argued that Obama's "answer is to borrow money we can't afford.. Just like Europe. President Obama's European answers are not the right solution to America's challenges."
The effort to link the president to the struggling old continent across the Atlantic has enough truth in it to be potentially troublesome. When Obama first emerged on the scene, he was hailed as a saviour in Europe. Remember those cheering crowds in Berlin during the 2008 campaign - and the strange Norwegian decision to award the newly elected president the Nobel Peace Prize?
Obama's signature social reform - the provision of universal healthcare - also moved the US much closer to a European social model.
Europeans like to portray the US as a deeply insular country barely aware of the rest of the world. The next presidential election could challenge that prejudice. For better or worse, "Europe" will loom large as the candidates battle for the White House. © 2011 The Financial Times Limited