European leaders understand the problem. But change is painful, and populists wait in the wings.

Follow this authorFareed Zakaria's opinions

These economic challenges are mirrored in the geopolitical arena. Europe remains a conglomeration of countries that pretend to have a unified defense and foreign policy. Defense spending is rising, but remains too low, having gone down to a new normal since the end of the Cold War. Germany is the best example. In the 1980s, West Germany had more than 500,000 soldiers in its army, on high alert to take on a Soviet invasion through the Fulda Gap. Today, a unified Germany has fewer than 200,000 troops under arms and readiness levels are not nearly as high. The British navy that once ruled the seas is now smaller than it was in the 17th century and though efforts are underway to boost spending, two of its warships were recently decommissioned because there simply weren’t enough sailors to man them.

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European countries need to spend more but they spend a considerable amount even now. Alas, much of it is wasted because there is little coordination and no grand strategy that animates it. Many West European countries still spend money on territorial defense — who is going to invade Belgium? — when they should focus on the capacity to move troops and equipment to defend the eastern frontiers of Europe, which is where the threat comes from. Again, because European producers do not have continent-wide scale, much of Europe’s defense spending goes to U.S. companies.

The solution to Europe’s woes can be summarized in one line — a deeper, more united, more strategic Europe. But that solution means, inevitably, more power to the European Union, which feeds the populist backlash that was so evident in last week’s elections. A European politician explained to me the continent’s dilemma. “We know what to do,” he said. “We just don’t know how to win an election after we do........

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