I can think of a number of possible outcomes in Iraq, but al-Qaeda defeating the United States isn't one of them. The author is another European pressie trapped in the Vietnam paradigm - he's better at economics, obviously, and ought to stick to it.
European "lending" to support our Big Mac and SUV habits (you have to cut foreign correspondents some slack when it comes to worn cliches) is, in reality, them purchasing into an economic arrangement that offers them the best return for the dollar, EU, or whatever. Where that return improves elsewhere, the money will follow, and that will provide the necessary corrective for the french-fry-and-4WD "addiction." This is true whether that money is Irish or Saudi or Martian.
If the American psyche is at risk it is so not so much from the specter of military defeat (when in fact we've lost 800 people over a year and a fraction defeating our enemy utterly and overturning his government), as from a constant din of negativity from a groupthink-shackled press both here and abroad. It doesn't make much difference, though - once we turn over the reins to a new Iraqi government the world press will find a way to declare it a defeat regardless.
As I read this, I'm overhearing a two leftwing coworkers discussing how we are "losing the moderates (Iraqis) in droves".
The Media is, and has been for 40 years, our enemy.