Before attacking the allegedly foreign BP, American politicians might also pause for a moment to reflect on the intimate links between politics and the oil industry in the United States. This is surely one of the biggest reasons for the lax regulation of deep-sea oil drilling.None of this excuses BP’s engineering mistakes and woeful public diplomacy. Nor would I seek to downplay the full horror of what has happened. But it does remind us that, while the US is in many respects the most globalised society in the world, it can also be surprisingly insular and nationalistic. Americans’ knowledge of what happens abroad is limited, and often reduced to a cartoon-strip view of the rest of the world.Americans identify BP as a British firm, and they know that Britain is in Europe. They also seem to think that Europe has gone down the tubes. Its currency crumbles like its ancient buildings. It is a historic relic, bust but still bragging.Europe, like BP, has its share of problems. But we should not allow American politicians who do not even possess passports to write us off with the same patronising sneer that some Europeans used to reserve for President George W. Bush’s administration and policies.The European Union, for all the woes of the euro, remains the largest economy in the world. It is bigger than the US’s, almost twice the size of China’s, and between four and five times the size of India’s.The EU is the largest trading block in the world, and it has coped with the rise of China in the global marketplace far better than America or Japan has. In the decade after 1999, China’s share of total global exports rose from 5.1% to 12.4%. Japan’s share fell by four percentage points, and America’s fell by almost seven, from 18% to 11.2%, while Europe’s share fell by only 2.4 percentage points, from 19% to 16.6%. Europe has the best environmental record of all the big powers, is the largest provider of development assistance to poor countries, and is politically stable. Europe’s problem is part of what it believes to be its greatest achievement. Europeans think that we enjoy the highest quality of life in the world, combining freedom with social solidarity. Welfare democracy goes hand in hand with pluralism, the rule of law, and a deep-rooted civilisation.Smug self-satisfaction makes us resistant to embracing the changes necessary to maintain our standard and quality of living. Our sense of entitlement has run far ahead of our ability to pay for it.That is why so many European countries today face such huge public-sector deficits and, with a falling birth rate and an aging population, we are likely to find that European growth rates will lag still farther behind those of Europe’s competitors in the next few years.The introduction of the euro was supposed to spur the less dynamic and competitive European economies, mostly in the south of the continent, to drive down their costs and increase their competitiveness. Then they could converge with the more efficient and prudently managed economies, like Germany’s.That did not happen. Spain, Greece, Portugal, and Ireland, in particular, allowed the low interest rates that accompanied the euro’s introduction to fuel domestic booms. Far from pushing through structural reforms, they let domestic wages and costs rip, reducing their competitiveness relative to Europe’s better-run economies. For example, the gap between Spain and Germany in terms of cost efficiency is probably more than 20%.This is the crisis that Europe now faces. How can we push through the reforms that will cut public spending to levels that we can afford and raise our ability to compete internationally? We have to extend our single market to services and energy, change unaffordably generous pension arrangements, invest more in research and development, reform our universities, and channel more money to the job-creating industries of the future, like environmental technology. American exceptionalism, when it runs rampant, is a tsunami to be avoided. The oil company BP is discovering that right now.The environmental disaster destroying seaside communities around the Gulf of Mexico and killing off marine life is a globally important tragedy. BP has to take its sizeable share of the blame. So, presumably, should the American companies like Transocean and Halliburton, which were part of this doomed enterprise. But their nationality seems to have let them off the hook.BP’s corporate responsibility is huge. So, too, was that of the American companies that caused the chemical disaster at Union Carbide’s plant in Bhopal, India (which killed 3,000 initially and perhaps another 15,000 in later years), and of those that caused the Piper Alpha oil-rig accident, which killed 167 people in the North Sea in 1988. Corporate sin is not unknown in the US. European exceptionalism – the idea that we are the best at delivering values and prosperity – is as much a problem as the American kind. We will not thrive and prosper in the future by resting on past achievements. Welcome to the twenty-first century. Europeans have to adjust to it, rise to its challenges, and confront competition from the emerging powers. We cannot live forever in the past, magnificent as its relics may be.Chris Patten, the last British governor of Hong Kong and a former European commissioner for external affairs, is chancellor of the University of Oxford. © Project Syndicate, 2010.