Reality dawned cold yesterday on a grey January Washington. The Americans have now followed their British allies in conceding that after a decade of extended conflict the first line of defence is and must be the US economy.

Indeed, echoing many a past (and not so past) British defence review the rendering weaker of an already hard-pressed US military was explained away as the maintenance of US “…military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats”. Nice try, Mr President.

In his foreword to “Sustaining US Global Leadership: Priorities for 21st Century Defense”, President Obama pointed to the very hard choices America must now make to credibly defend itself in a world very changed since this difficult century began twelve years ago. ‘Choice ‘in defence strategy always means weakness. Two questions stare out from this review like rabbit eyes in headlights. First, will the world permit America such ‘choices’? Second, what does this cold dawn mean for defence-naked Europeans?

Here are the facts of the matter. The US military will become leaner (‘cut’ in plain-English) with the aim of “maintaining superiority” where it matters for 21st century America – Asia-Pacific. There will be cuts worth at least $450bn, although given the size of the US deficit this could be the merely the harbinger of much deeper cuts and programme delays. Indeed, the defence budget could lose an immediate additional $500bn this year due to the inability of the US Congress to agree deficit reduction. There will likely be a 10-15% cut in the size of the US Army and Marine Corps over the next decade. Critically, US Defense Secretary Leon Panetta said that with the Iraq War now over and the Afghan War soon to be declared over the US military, “…will no longer need to be sized to support the large-scale, long term stability operations that dominated military priorities and force-generation over the past decade”. Until now US military strategy has held that the US military must be able to fight two medium-to-large scale wars simultaneously. That strategy is now dead.

Will the world permit America the luxury of choosing which wars to fight and how to fight them? The answer is probably no IF the US still wishes to remain THE superpower. The simple truth is that implicit in this review is a very hard grand strategic realisation by the Americans that they will in time lose their superpower status. Indeed, the President explicitly suggests in the review that the economic is the true font of power. This implicitly suggests an acceptance by the US that China will in time emerge as the balancer of American power. This explains the shift away from Europe to Asia-Pacific and the need for Asian and Australasian allies.

The military-strategic implications of the review reflect that grand strategic judgement and are no less profound. In essence the US is resorting back to a strike and punish posture and away from the grand stabilisation strategy which was the essence of America’s post-Cold War engagement. Partly driven by the nature of post-911 counterinsurgency operations and partly driven by the sensibilities of European allies who can never go anywhere beyond Europe unless they leave a place looking like Europe, the US military was sucked into stabilisation operations for which the US military was not best suited or prepared. The dangerous inference in the new strategy is that henceforth the US will only fight nice, neat and ‘clean’ wars. Oh that the world was so accommodating.

For Europeans this should really be a wakeup call. Sadly Europe’s strategic sleeping Rip van Winkles are far too gone for that. Indeed, the link between defence strategy and military capability was long ago broken in Europe. Until yesterday the transatlantic relationship involved Europeans pretending to be serious about defence and the Americans pretending to believe them. This has left NATO about as hollowed out and militarily robust as an ice cream cone. That must now end.

America will still ‘strategically reassure’ Eastern Europe against those troublesome Russians, military technology permits that and in any case Moscow is not really going to invade any NATO/EU member just yet. Beyond NATO’s frontier is an entirely different question. However, the choice for Europeans implicit in the 2011 operations over Libya has suddenly become far more pressing. Either do far more as ‘Europe’ in and around Europe to enable US forces to focus on Asia-Pacific, or in time add some limited capability in support of the US.

My bet that is that as the Eurozone crisis leads inevitably to a tighter core political grouping organised around Germany the EU will become the focus for Franco-German-led ‘European’ security and defence efforts. The British will then join a US-led grouping that includes Australia, Canada, Japan and possibly even India.

NATO? It will be left to focus in its remaining days on maintaining what is called military interoperability (the ability to work together) between forces that increasingly talk a very different strategic language. Indeed, implicit in the new US defence strategy is a world view very different from that of Continental Europeans. Alliances can survive such dissonance for only so long.

Yesterday the world became ever so slightly colder, America ever so slightly weaker and Europeans ever so slightly naked. A new day has indeed dawned. It is time for Europe to wake up.

Julian Lindley-French is Eisenhower Professor of Defence Strategy at the Netherlands Defence Academy, Fellow of Respublica in London, Associate Fellow of the Austrian Institute for European and Security Studies and a member of the Strategic Advisory Group of the Atlantic Council. He is also a member of the Academic Advisory Board of the NATO Defence College in Rome. This essay first appeared on his personal blog, Lindley-French’s Blog Blast.