This paper offers a snapshot of European political, economic, and social trends at the beginning of 1994. It describes the mood as sober if not downcast, with Europe facing the seemingly insurmountable tasks of maintaining progress toward European unity and dampening violence in the Balkans. It discusses the eroding position of national governments in the face of social and technological change, forecasting a kaleidoscope of cooperative and balancing arrangements rather than unity. Anticipating a possible mutual distancing in European-American relations, the paper analyzes the issue of European identity, describing tendencies toward integration as well as fragmentation. Briefly reviewing the role of key states, it points out the absence of European leaders. Noting questions surrounding the effectiveness of NATO and the nature of the expanded European Union, the paper concludes that a U.S. policy of multilateralism requires Washington to encourage its close allies toward a capacity to act.