The triggers may differ — schools in France and Belgium, housing in Spain and Portugal, the cost of living in Italy, corruption and a mixture of the above in Serbia — but the root is the same. These are the protests of a generation that believes it has been robbed of its future. It’s a conclusion that’s hard to argue with. The social contract its parents knew — work hard and you will, at the very least, secure a home, be able to support a family and be better off than those that came before you — has collapsed. For many young Europeans without inherited wealth, adulthood means drifting from one precarious job to the next, earning barely enough to cover the cost of rent and groceries, let alone start a family. That is, if they find work at all. Meanwhile, they have watched the institutions that were supposed to give them a start in life and cushion its blows — schools, universities, health and youth services — wither under austerity and privatization. 

There is no doubt that young people have overwhelmingly borne the brunt of the neoliberal policies pursued over the past decades. That neoliberalism has driven inequality to new heights is widely acknowledged; what is less often noticed is that this inequality is increasingly drawn along generational lines. The geopolitical analyst Arnaud Bertrand recently shared some pretty extraordinary statistics on X regarding France: the over-60s — roughly a quarter of the population — hold around 60% of the nation’s wealth. They also receive nearly two-thirds of all social spending by the French government, in the form of pensions that, under the current system, are paid for by younger generations. This continuous bottom-up generational transfer of wealth is even more extraordinary when one considers that the average French retiree now has an income higher than the average worker.

Yet though the protesters often explicitly frame themselves in generational terms — most obviously Germany’s “Gen Z regelt” (which roughly translates as “Gen Z’s got this”) — their demands aren’t phrased as claims against the old. This is surely the right approach. Blaming the boomers would be a mistake. They simply had the good fortune to grow up in an era of full employment, affordable housing and decent pensions, and there is nothing scandalous about aging societies spending more on the old. Moreover, much of that wealth is concentrated in the hands of a small minority of boomers; not all older people live a luxurious life, of course. Ultimately, the problem is not that pensions are too high; it is that the young are being denied what their parents took for granted. The generational divide is simply how a decades-long class war from above is experienced by those who came of age after workers had already lost it, and who inherited a political-economic regime built to transfer wealth upwards. In Europe, that regime has been written into the institutional architecture itself — the euro, the Maastricht treaty, the fiscal rules — which systematically favors asset holders over wage earners, and established workers over new entrants. 

The mechanisms are well understood. A decade of quantitative easing inflated the property and financial assets held by the old while wages stagnated, locking the young out of home ownership. Labor market reforms — from Italy’s Treu package and Jobs Act to Germany’s Hartz laws and France’s El Khomri law — preserved the security of those already inside while consigning newcomers to a revolving door of temporary and increasingly precarious contracts in the name of “flexibility”. After 2010, austerity fell disproportionately on education, youth services and public investment. Existing pensions were largely shielded, while future ones were quietly cut. As a result, across Europe, government spending on older people has risen, while public investment has been gutted. Then came the pandemic, which cost Gen Z years of schooling, work and social life, followed by a surge in inflation, made worse by an energy shock that Europe’s leaders largely inflicted on themselves. 

As if that weren’t enough, the young are now being told to accept further cuts and deteriorating living conditions to make room for rearmament and an open-ended war — for which, it seems, there is always money. Just a few weeks ago, as French police were firing tear gas at teenagers, EU leaders tasked the Commission with finding another €70 billion for Ukraine in 2027, on top of the €45 billion already earmarked. The fiscal rules that were never relaxed for schools or hospitals are being bent for defense, through national escape clauses and joint borrowing for weapons procurement. And the young have noticed. They are told there is no money for their classrooms, while new billions are found for a war with no end in sight — a war that, as conscription returns to the European agenda, they may even be asked to fight. In many countries, young people are starting to explicitly link the cost-of-living crisis with the rearmament drive. 

The real question, then, is not why the young are revolting, but why it took them so long. The economic roots of these protests are undeniable. But are they the whole story? Most conservative commentators have focused instead on the presence of second-generation youths of Arab and African background, and on their leading role in the violence and looting, above all in France but also in Italy. For much of the Right, the riots simply confirm what it has been saying for years: that mass immigration has been an unmitigated disaster, filling European cities with a largely Muslim underclass that has no interest in integrating, and that, in the crudest version of this narrative, is cast as bent on destroying the very fabric of Western civilization, in some cases with the help of the “far-Left”. The demands of the overwhelmingly peaceful protests, meanwhile, go largely unheard. 

There is an irony here. The populist Right never tires of complaining that a “globalist establishment” has impoverished and deindustrialized Europe. Yet when young people take to the streets, sometimes violently, against that very establishment and the consequences of its policies, it cannot bring itself to believe that they might have genuine grievances. Instead, it instinctively assumes that someone must be pulling the strings: Islamists, Antifa, Mélenchon. 

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Bon courage to the French protesters

By Yanis Varoufakis

It is, of course, right to distinguish between the peaceful protests demanding economic reform and the rioting and looting that accompanied them. But are they really two entirely separate stories? There is no question that much of the looting, in France as in Italy, had a strong second-generation component drawn from the banlieues and the marginalized peripheries of Italian cities, with little discernible ideology behind it. Nor is there any point denying the costs of mass immigration, from public safety to the pressure on public services. Many of those involved in the violence were clearly acting out of opportunism. And the growth of separate communities of different social and religious backgrounds, often living in conditions of extreme exclusion, is clearly a social time bomb, one that has already done serious damage to social cohesion — and those on the Left who deny this reality are as blinkered as those on the Right who fixate on it at the exclusion of everything else. 

One might go further and argue that mass immigration has itself been part of the neoliberal social engineering of recent decades, not least by creating a reservoir of cheap labor. One might also argue that rioters running amok at peaceful demonstrations damage the protesters’ own cause, drowning out their demands and handing the security forces a pretext for a crackdown. There have even been claims that the French police deliberately allowed the destruction to happen in order to justify mass repression. 

These are all valid arguments. But they raise an obvious question: why do the protesters raging against the status quo not turn their anger on these immigrants and instead often march alongside them? Are they simply blinded by naïve Left-wing ideology? Or is something deeper at work? It is more likely that they experience their struggle primarily through a generational lens, one that cuts across ethnic, and to a certain degree class, lines. That seems far more convincing than the “islamo-gauchiste” theory, which holds that this cross-ethnic alliance is not spontaneous solidarity at all, but something engineered by Left-wing parties such as Jean-Luc Mélenchon’s La France Insoumise. That may hold to some degree in France, but it doesn’t hold in Italy, where there is no Italian LFI, no comparable alliance between the Left and Muslim voters, and yet the same mixed crowds appeared in the streets, as elsewhere.

Yet reducing the violence solely to its second-generation component is also misleading, and far too comforting. Young people of European background have taken part in it too. The crowds that recently rioted in Milan included kids with Italian-born parents alongside those from immigrant families. So we have to ask to what extent this violence is also a reaction to a system that offers no avenue for political change. This is not to justify it. Violence, in and of itself, leads nowhere emancipatory. But we cannot escape an uncomfortable fact: an increasingly authoritarian system that is actively committed to blocking any democratic systemic change, with no social intermediaries between power and the masses, and no forces capable of giving the revolt a direction and a political content, of placing it under the guiding idea of social emancipation, is bound to breed violence. And then there is the merciless generational arithmetic: the young are a minority in every European society. They cannot win elections on a generational platform.

But the violence — and especially the wanton looting — also expresses a deeper malaise, one that goes beyond economics. It reflects the nihilistic void into which Western societies have sunk: when individualism, purposelessness, anxiety and despair become the norm, we shouldn’t be surprised if the result is collective depression, or rage. At a time of moral decay at all levels of Western societies, particularly among its political and corporate elites, who systematically display little respect for either human life or (other people’s) property, is not a little delusional to expect the youngest and most disadvantaged to hold themselves to a higher moral standard than their rulers?

Writing about the riots in England in 2011, the German social psychologist Götz Eisenberg described the young as the “surplus generation” — no longer needed by society, its labor expendable, deprived of the chance to build an independent life through its own efforts, yet constantly dazzled by the promise of self-realization through consumption, a state that is increasingly beyond its reach. Fifteen years on, his diagnosis is more relevant than ever — and indeed Britain remains a social powder keg that could once again explode at any moment. Violence is no solution to social problems, but neither does it arise in a vacuum. Where political and economic power has become anonymous, anger turns on the nearest symbols, such as a Louis Vuitton boutique. A shop window can be smashed; financial markets and austerity can’t.

That said, we shouldn’t make the mistake of assuming the protestors represent an entire generation. The same generation that fills the streets also votes, in growing numbers, for the anti-immigration Right. In France’s 2024 election, a third of under-25s backed the Rassemblement National; in Germany last year, more than a quarter of young men voted AfD. The anger at the establishment is the same but it is channeled in the opposite political direction. The question is whether European politicians, whether incumbents or its “populist” challengers, have any real answers.

Addressing the protesters’ grievances would require systemic change: greater public investment in education and housing, higher wages, more secure jobs, economic redistribution (focused on the real wealth hoarders, not pensioners in general), and a rational energy policy, which would itself demand a radical shift in geopolitical paradigm. However, it’s hard to see how any of this could be achieved within the current EU-Nato architecture, which no major party seems prepared to challenge. Meanwhile, the idea that the problem of alienated second-generation youth can be solved through even more heavy-handed repression — or perhaps even “remigration” — is little more than a fantasy.

The question, then, is whether the young people of Europe can replicate what happened in Serbia. That is a country that faces much the same demographics — an aging and shrinking population — yet its student movement managed to build a platform that drew support across generations, partly by shunning traditional ideology and unifying under a simple, non-partisan message for change. It’s ironic that today this seems harder to achieve in the “liberal-democratic” West than in a country routinely described as authoritarian.

In his speech to the European Parliament last month, Carney kept planting (metaphorical) trees. He described how First World War Canadian lieutenant Leslie Miller had gathered acorns from a scorched French battlefield, smuggled them back home to Ontario, and planted them. In time, they grew into a fine oak forest. A century later, grafts from those oaks were replanted in France. “A profound circle of renewal was completed,” Carney told MEPs. 

Now, Carney wants to graft a Canadian maple onto the European family tree. Today, he is hosting European Union leaders in Montreal, in the hope of establishing how Canada can become the union’s first ever “associate member”. But the bloc may just drop the offered title entirely, after major pushback from EU members who don’t want Canada formally in their club.

Carney is attempting to pull off a monumental act of historical reverse engineering — one that would see the New World returning to the shores of the Old. Finding itself in President Trump’s crosshairs, Canada is trying to pivot from being America’s dependent northern brother to Europe’s long-lost child returning home. “It is my strong personal view that the international order will be rebuilt, but it will be rebuilt out of Europe,” Carney has predicted.

The problem is that this reunion will not work out. While their roots intertwine, Canada’s relationship with Europe faces hard geographic, economic and cultural ceilings that cannot be overcome by mere treaties and titles. Canada is a non-native species on European soil.

Carney takes every opportunity to remind Canadians of their British and French “founding peoples”, even persuading King Charles to travel to Ottawa to open Parliament last year (Carney’s brother is the chief operating officer at Kensington Palace). Yet despite the current feud with President Trump, Canadians have far more in common with Americans. Our European ancestors, who threw caution to the wind and boarded ships bound for Canada, chose to leave the Old World behind for a reason: to seize individual and economic opportunity. To escape wars, class divides, and poverty. To build a new and different society.

What, then, is Carney hoping to get out of the EU? He has vowed to double non-US exports in the next decade and wants Europe to be a bigger trading partner, claiming the continent is even more economically enticing than China. He is particularly interested in European defense technology: Canada has inked a Canada-EU Security and Defense Partnership, and chosen German-Norwegian shipbuilder TKMS to build it a fleet of 12 new submarines. There’s also been talk of Canada joining an EU-Canada Digital Trade Agreement, Erasmus+ (the EU’s education program that allows students to study abroad), and Horizon Europe (the bloc’s funding program for research and innovation). There are rumors that Canada is aligning with Europe on AI regulations, pension investment, competition watchdogs, forest fire water bombers, and undersea telecommunications cables; it is also said to be taking part in the EU space program. But, most importantly, Canada has joined the European Broadcasting Union, clinching a spot in Eurovision and the chance to introduce the rest of the world to Inuit throat singing.

The Europeans, in turn, are interested in Canada’s critical minerals (lithium, graphite, and nickel), energy (liquefied natural gas, hydrogen), and the Canadian Arctic. A deepened Canadian partnership would make Europe less reliant on China’s rare earth deposits, America’s technology, and Russia’s oil. “Canada is truly the most European of the non-European countries,” Ursula von der Leyen, president of the European Commission, asserted during her State of the Union address in June. In September, she extended the associate member invite to Carney, whom she calls “dear Mark”. As she landed in Montreal today, the German politician signaled she hasn’t given up on granting Canada the new title, standing in defiance of many of her European colleagues.

The Canadian government views EU associate membership as its best chance of diversifying away from the US. (This is after Carney walked out of American trade deal negotiations in the eleventh hour because, as he put it, Canada’s sovereignty was being stolen.) Europhile Canadians see Europeans as kindred spirits equally devoted to democratic institutions, large social safety nets, and the defense of Ukraine. They dream about the possibility of greater freedom to live, study and work across Europe.

Those opposed to EU membership, however, are wary of Europe’s anemic economic growth, lack of technological innovation, and aging population, as well as its strict data rules, agri-food standards, and energy regulations. They fear that joining the EU could result in more migrants at our borders, as well as Canada having to send roughly 1% of its economic output to Brussels. They say that rather than surrendering our sovereignty to the Americans, we’d just be surrendering it to the Europeans. “We will never be the 51st US state. And we will never be the 28th EU state,” Conservative Party of Canada leader Pierre Poilievre told his supporters.

According to recent polling, around 81% of Canadians want closer integration with the EU, while remaining outside of the union. But Canadian support for closer integration falls to 49% when the prospect of EU membership is raised. The consensus is clear: Canadians want to have a closer relationship with Europe, but they do not want to become Europeans. 

This tension is evident in the difficulty the Canadian government has had describing the new “associate member” relationship — are we just dating, or getting married? The relationship is now up in the air, as members appear prepared to vote against the associate member designation. “We’ve definitely put the cart before the horse,” admitted one European diplomat. “Nobody really knows what it means,” said another. “The good news is it doesn’t matter about specific names or nomenclature,” said a visibly perturbed Carney responding earlier this week. “What matters is the difference that it will make to lives of Canadians.”

Talks around Canada’s new membership status have seen Germany, France, Italy and Greece push back. They don’t feel consulted. They are frustrated that Canada is receiving “association without accession”, reaping European rewards without meeting the standard requirements to gain membership.

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How MAiD killed Canada’s humanity

By Marilyn Simon

The obstacles to Canada’s European romance are numerous. On the economic front, 72.5% of Canada’s exports are sent to the US; the entire EU currently takes a measly 5.5%. In addition, 85% of Canada’s energy is sent to America. In a single month, Canada exports more to Oklahoma than Germany, more to Kentucky than France, and more to New Jersey than Italy.

Then there are the societal barriers. It is admittedly difficult to pinpoint a distinct Canadian culture: in many ways, Canada is already its own often dysfunctional union. A vast country of 10 provinces, three territories and two official languages is home to far North Inuit, Quebecker maple-syrup makers, Newfoundland fishermen, Albertan cowboys and everyone in between. Add to that the vexing interprovincial trade barriers that cost our country $200 billion a year, and it becomes clear we have our own issues getting along among ourselves.

Yet a shared Canadian culture does exist, and it is plainly different from Europe’s. Our ancestors left behind most of the Old World’s traditions, bloody revolutionary battles, and class hierarchies. We are a young country of just 159 years old. We are more individualistic. Our work often defines our lives. Living in the second-largest nation in the world, we spread out across our vast landscape. We live in larger homes and drive bigger cars: for 16 years straight, the Ford F-150 truck has been the best-selling vehicle in Canada. Then there’s the fact that within Canada, hundreds of Indigenous nations increasingly practice self-governance. Our nation is undeniably “un-European”.

While we hate to admit it, we share much with and depend on Americans more than anyone else. Two-thirds of Canadians live within 100 kilometers of the American border. The US covers 60% of the budget for our Arctic defense radar stations. English Canadians consume almost exclusively American arts and entertainment: in 2023, only 3.3% of our total box office revenue came from Canadian films. 

Currently, 56% of Canadians say they have more in common with European nations than the US. But the hostile American president has completely muddied the polls. Remove Trump from the equation and far more Canadians would agree they have more in common with Americans than Europeans. In the end, Carney’s best intentions, buttressed by globalization, technology and emotion, simply cannot trump geography, history and culture. As much as Canadians might want it to, Europe cannot fill Canada’s America-sized hole.

Prime Minister Carney keeps a map of his grandparents’ Irish hometown of Aughagower on his desk in Ottawa. He says it acts as a friendly reminder of where he came from. But that’s just it. The reality is Europe is where Canada came from, not where it is going.

France is in the grip of social breakdown, with financial chaos looming. The urgent question now is: could it spread? A leading expert on Europe and its discontents, Wolfgang Münchau explores how the next debt crisis might start — and how it could both destroy the eurozone and scar Britain’s economy. 

***

“The Irish say they are not Greece. The Portuguese say they are not Irish. The Spanish finance minister said last week that Spain is not Portugal.” I wrote these words in the Financial Times over 15 years ago, as the eurozone sovereign-debt crisis raged. Fast forward to today, and the big news is that Belgians are not French. Expect, soon enough, to hear that Italians are not Belgian. With all eyes currently on France, on the violence, the protests, and the rising possibility of a genuine financial crisis, the key question now is how such a crisis might spread.

The first eurozone country in the firing line today is Belgium. Like the French, the Belgians allowed their budget deficit to rise, and the national debt to soar. To be fair, the country’s leaders are aware of the risks. To quote Bart De Wever, Belgium’s prime minister and one of Europe’s smarter leaders: “We absolutely must distance ourselves from the French situation to prevent it from spreading to us.” He might as well be telling us that “Belgians are not French”.

In the event, I worry De Wever will have less control over the situation than he thinks. That’s partly because Belgium’s debt-to-GDP ratio — at 108% — is so high. But also because the other two countries in the danger zone are France and Italy: respectively the EU’s second and third-largest economies, and two of the most indebted countries in the bloc.

At the moment, French costs on 10-year bonds is over 5%, with the Italian rates a little lower. To be clear, neither of these rates are in crisis territory just yet — but they are getting closer. Once interest rates exceed a certain threshold, a doom loop sets in. Higher interest rates raise debt servicing costs, which drives up the budget deficit, which drives up borrowing, and which again drives up interest rates.

No one can tell when, exactly, a crisis might arrive: it depends on the country and its politics. Yet once investors conclude that a country cannot conceivably afford to pay the debt, interest rates will surely start to jump, the mechanism through which practically every financial crisis plays out. We are in the phase where everybody still pretends that the situation is under control, and that all that needs to happen is for governments to save a bit of money here and there. In practice, though, ministers of all stripes find this hard.

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Mark Carney's EU delusion

By Wolfgang Munchau

Just recall that France is in its current mess because of Emmanuel Macron. Who could have predicted that his decade-long presidency would end with his country in flames, and with a financial crisis looming? Yet the policies Macron pursued earlier in his tenure nonetheless led him here. The austerity imposed by his government bred more violence, while cuts in public investment deterred private investors.

Looking at the presidential candidates in France today ahead of the election next April, I struggle to see how the country will end up with a government that succeeds in doing all of the following: bringing the budget deficit under control; avoiding social unrest; complying with European rules; and staying in the eurozone. Something has to give here.

Nobody, not even leading French candidate Marine Le Pen, wants to quit the eurozone. Nor, for that matter, does Jean-Luc Mélenchon. If you thought Brexit was disruptive, a euro exit would be on a different order of magnitude. Yet what many Europeans, including politicians, don’t understand is the relationship between debt and membership of the eurozone. Put simply: you can’t default on your debt and expect to keep the euro. Debt serves as collateral for the money the banking system gets from the ECB. If a country defaults on its debt, the banking system inevitably freezes up.

Given these fundamentals, how might a eurozone crisis actually play out? Le Pen, even more likely to win the presidency now that Paris is burning, is probably crucial here. One option is that, notwithstanding her rhetorical largesse on the campaign trail, she decides to impose austerity once in the Élysée. Her popularity ratings would soon slump, and would likely not recover. You might think this is totally irrational, but we saw this pattern repeat itself over and over again during the eurozone crisis.

Alternatively, Le Pen might conclude that France cannot service its debt if interest rates stay high. She could therefore ask the European Central Bank for a bailout. If the ECB refused — helping France would drive inflation up for everyone — a President Le Pen might instruct her finance minister to default on a payment to bondholders.

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Is France about to default?

By Wolfgang Munchau

In the short-term, at least, there are advantages to such an approach. First, it would free Le Pen up to default on more foreign debtors. That, in turn, could allow her to impose less austerity than she might otherwise have had to. France also would benefit from lower debt-servicing costs, and a more competitive exchange rate, making French companies more competitive against the rest of the world. And perhaps most importantly, France will have its own central bank, one able to set interest rates suited to the country’s economy, and which could be relied upon to act as a backstop in a crisis.

All the same, France defaulting on its debt would likely lead to a French exit from the euro. Should we ever get to this point, the ensuing financial crisis would dwarf everything we have ever experienced. Financial institutions would fail all over the world. For its part, the eurozone might not survive, as other countries default on their debts and crash out in turn. Ironically, one of the European countries most affected in this scenario would be the UK. Despite not being a member of the EU, let alone the eurozone, Britain’s capital market would be deeply vulnerable to chaos across the Channel.

You might well wonder why anyone in their right mind would choose this scenario. The problem is that we’d only get to the implosion of the European financial system after several other things happened first. No one would choose it from a menu.

I’m not saying that there’s no way out. But none of the alternatives are obvious or easy. Leaving the eurozone might well end up being the easiest option, especially if you don’t care about the consequences for the rest of the world.

Having spent a good part of my career writing about the eurozone’s financial crisis, and its ongoing economic decline, I concluded that the one big mistake the EU committed was to choose a monetary union without installing the necessary political infrastructure first: a fiscal union, a single capital market, and a single sovereign debt instrument. The introduction of the euro was the crowning achievement of Europe’s political integration in the Eighties and Nineties. Then it stopped.

This is not an argument about the pros and cons of European integration as such. If you oppose political integration, you should not join the euro. The UK’s opposition to the euro was internally coherent. Poland is an example of a country that would not dream of leaving the EU, but it, too, chose not to join the euro. But what we’ve learned in the last 15 years is that if you join a single currency, you don’t want to stop there; you must go all the way. This is where the bloc went wrong. A half-way house of an unfinished monetary union is unsustainable. By unsustainable, I don’t mean bad. Just that either it’ll be made sustainable — or it’ll end.

Some people argue that political integration may yet happen. I fear this is wishful thinking. The politics of the EU has been moving away from political integration for quite some time; the euro crisis was probably the last moment when a fiscal union could have been realistically agreed. Back then, the far-Right was not yet a political force in most countries, while Germany’s economy was strong enough to theoretically accept a closer union. The fact that, even then, Angela Merkel said nein is telling — certainly, in its newly weakened state, none of Germany’s bickering political parties even mention EU integration today.

Superficially, the euro crisis ended when the ECB supported national bond markets through quantitative easing. But the underlying problem of economic divergence between member states was never really resolved, even as the solutions were only designed for small economies. So, if you tell me that France is not Greece, I’d happily agree — except to add that it’s worse.

How times have changed. For Labour now has a Prime Minister apparently intent on reopening the Brexit debate, even as he frames his political project around reasserting state power over the market, something seriously undermined by EU membership. Never mind Andy Burnham’s attacks on the Brexit “status quo”, let alone Treasury plans to reignite “Project Fear” — for decades, the British Left understood this contradiction perfectly. Postwar socialism, proclaimed by Attlee in the hallowed year of 1945, relied too heavily on statist mechanisms, from tariffs to industrial subsidies, basically incompatible with the freedoms of the European bloc. Facilitating free trade through a giant continental single market was a concern for the capitalists, for the bosses — not for the labor interest.

As Gaitskell’s thundering speech makes clear, meanwhile, this approach to Europe was once near-consensus even on the Labour Right, uniting him with socialist firebrands like Nye Bevan. As Gaitskell’s rival once put it, supranationalism was a symptom of “political malaise” that “elevated the marketplace”, resulting from a failure of socialists “to use the sovereign power of their parliaments to plan their economic life”.

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Andy Burnham should embrace his inner Trotsky

By Jonny Ball

Here, perhaps, are faint echoes of Burnham’s nostalgic lament for a social democracy sacrificed at the altar of market efficiency. Where Bevan identified Europe with mammon, and where the Right’s Friedrich Hayek rhapsodized over “Interstate Federalism”, today Burnham identifies Brexit as one of his “four horsemen of Britain’s apocalypse”. The irony, of course, is that his other three riders are deindustrialization, austerity and privatization: each engendered as heartily by European technocratic elites as by Britain’s homegrown ideologues.

All the same, there is a political calculation at the heart of Burnham’s pre-EU shift. His immediate electoral challenge lies in reuniting Britain’s Left-wing voters behind the Labour banner, yet the fiscal picture is bleak. Manchesterism’s promise of large-scale renationalization, green investment, municipal housebuilding — all could potentially attract Labour-Green defectors back into the fold. But they would also raise the ire of gilt traders all too aware of Britain’s inability to either constrain current spending or manage major capital projects effectively. Europe, then, offers a cheap salve, a way of rallying the twin forces of urban Remainia and provincial Bregret, while reinjecting dynamism into “UK PLC” without imposing huge costs on John Healey’s Treasury.

The problem is that this sets Burnham on a path toward breaking his so-called “Makerfield test”: that policies should be judged against their putative benefits for blue-collar and postindustrial Britain, as exemplified by his Wigan constituency. Unfortunately for Burnham, though, Makerfield voted 65% Leave. And while that enthusiasm is sure to have declined of late, the idea that there would now be a natural majority for Rejoin remains fanciful.

The break in the collective Labourite omertà on Europe, then, could be seen as part of a grim, reluctant acceptance of a future divorced from “Makerfield Man”: with Labour a progressive party, not a labour party, one made up of public-sector workers in alliance with urban social renters and young, downwardly mobile graduates. Rejoinerism might represent the final breach of a historical obligation, emotionally preserved by party bigwigs even today, that Labour should reflect its roots as an electoral vehicle built by and for the organized working class.

That nostalgia likely explains why the next Labour manifesto ultimately won’t promise British re-entry or even another referendum. Burnham, too, is as romantic as Gaitskell. No amount of polling data on Labour’s new base of white-collar professionals will rid him of his belief that the party should orient itself, at least rhetorically, toward some notion of “the traditional working class”, however broadly conceived. Of course, Labour will be happy to nurture a pro-European vibe, not least around some amorphous “reset in relations”. But don’t expect genuine pan-Europeanism, in the style of the Liberal Democrats or, indeed, Tony Blair, anytime soon.

As with much of Burnhamism, the point is in the signaling, not the substance. We might therefore see some limited reassociation, or a new, closer customs arrangement. And, to be fair, these options could offer a way to cut Brexit red tape without reopening the broader constitutional question. Still, even an unenthusiastic rapprochement could quickly cause trouble. Dominic Cummings has noted the paradox of Europhile progressives who champion regulations at home, yet who bemoan the imposition of bureaucratic hurdles on multinationals around cross-border trade. Meanwhile, some Brexit stalwarts will see any realignment as an undemocratic capitulation. And if the Treasury does indeed lay out the modeling numbers for various options, from re-joining the customs union to the full hog, it would still be a brave party leader to turn freedom of movement into an electoral issue come 2029.

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Don't fall for Project Smear, Mr Burnham

By Yanis Varoufakis

If that again hints at a party in limbo — trapped between its old Makerfield base and its new professional-managerial one — there are more practical reasons to be suspicious of Brussels. After all, neither the single market nor the customs union have been panaceas for Europe’s long-term trend of relative decline. Indeed, Britain has outgrown both France and Germany since leaving the EU’s free-trade and regulatory regimes. If AI really is the sector of the future, then Europe’s data regulations exclude the continent from its windfalls. Besides, the bloc Britain would now rejoin is not that of Mitterrand or Kohl: it would be the Europe of Marine Le Pen and Alice Weidel. The dissonance between the Europe of the Remainiac imagination and the actually-existing EU grows wider by the day — not least given the recent disorder in France. Besides, Britain would enter this unhappy arrangement without exemptions from the Euro and Schengen, nor the significant budget rebate, all available before we left.

Through all this, Burnham could do worse than recalling the lesson of his predecessors: embracing their Labourism not just in romantic rhetoric but in practice. The Prime Minister’s program, as sketched so far, is an attempt to “roll back the Eighties”: public ownership of utilities and rail, and a reindustrialization drive that favors British firms in public procurement. Each of these risks being stymied by the legal architecture of EU membership. European treaties make nationalization and compensation processes far more complex. Procurement rules require open tendering and preclude preferences for domestic bidders. The free movement of capital forecloses the controls that Attlee relied on to steer investment. Rejoining would not deliver the “social Europe” promised by Jacques Delors in 1988, instead binding Labour to a settlement that Burnham’s own program is designed to escape. That’s why Gaitskell and Bevan opposed Common Market entry over half a century ago, and why Burnham can’t now both pass the Makerfield test and commit to rejoining.

Here, of course, Burnham would be swimming against the tide. Left Euroscepticism, once hegemonic, is now relatively niche. In the 2016 referendum, “Lexit” was backed by only a smattering of half a dozen or so Labour MPs, the Communists, the Socialist Workers, and the Rail Maritime and Transport Workers Union. One notable holdout was Jeremy Corbyn, who former allies tell me likely voted Leave. The eccentricities of this merry band don’t detract from the incompatibility of the EU with building a more cohesive national economy.

While frictionless trade and globalization will find few defenders on the Left today — not in an age of “securonomics” and so-called “post-neoliberal” growth models — freedom of movement was itself an integral pillar of economic liberalization. The creation of a single employment market, one stretching from Belfast to Bucharest, imposed a sham level playing field upon populations with vastly divergent employment practices and payment standards. The UK, with its relatively unregulated labor market, then became what Helen Thompson has called “the employer of last resort”. And, concurrently, the old Left transformed into an altogether different political tribe, more defined by what Wolfgang Streeck calls “cosmoliberalism”, far more concerned with preserving European constitutional arrangements than with adherence to traditional social democracy. Borderless capitalism, once trumpeted by Hayek and his ilk, should be as unloved on the British Left as it is still among British voters.

And, here, perhaps, is one more lesson of history. Whatever Burnham’s own muddled blend of romance and reality, politics and pragmatism, the basic truth remains: the grand European vision of Jean Monnet and Robert Schuman never fully took hold in our small island nation. Even for British pro-Europeans, people like Gaitskell’s old protege Roy Jenkins, being “in Europe” long meant little more than inclusion in modernity, in the world of services and capital, and the competition it unleashed on old-fashioned British industry. It was a pragmatic arrangement, rarely viewed in romantic or grand historic terms. It was only after Brexit that the metropolitan middle classes began to get teary eyed about the 12 gold stars and Beethoven’s Ninth. And even then, the most regular complaint heard was over passport checks at the airport — not Anglophone exclusion from some lofty transnational demos. For peoples who had, on several occasions, engaged in mass slaughter over the constitutional status of Alsace-Lorraine, the EU may have felt like the realization of Enlightenment brotherhood after centuries of war. For Britain, though, its customs were alien, its languages incomprehensible, its people Other. Gaitskell understood that dilemma six decades ago, and changing Labour’s electoral coalition has not made it disappear.

Is reigniting the Brexit wars really a clever idea? I personally favored Remain in 2016 but became disenchanted by the campaign’s excessive focus on dubious economic claims. I argued at the time that Remain should offer a positive vision of Europe, rather than doom-mongering. But if Burnham asked for my advice today, I would tell him: don’t look at the polls. Don’t worry about “Bregret” or Labour Party politics. Look instead at the state of the EU, which has changed dramatically since 2016. 

Right now, the EU is not a club you’d want to join. In fact, the sensible Icelanders recently voted against pursuing EU membership. Despite barely surviving the Eurozone’s sovereign debt crisis, the EU never bothered to fix the underlying problems that triggered it, such as a fragmented banking system and the lack of a common capital market. Now another sovereign debt crisis could soon be on the horizon, with French interest rates going through the roof. And if the polls are right about France’s presidential election next year, the political center might shrink or even disappear as a political force, leaving France and the Eurozone under the influence of the far-Right. Does Britain really want to be in the same club as President Marine Le Pen or Chancellor Alice Weidel?

If Britain were to foolishly seek to rejoin, it would doubtless get a raw deal. For one thing, the EU will not be able, or willing, to offer the UK any rebates or opt-outs. In the past, such concessions have been achieved through diplomatic master strokes. Margaret Thatcher negotiated the rebate after driving everybody crazy about the issue. John Major landed the opt-outs, including from the euro, because he would otherwise have vetoed the Maastricht Treaty in 1991. But the age of miracles has passed. Since then, the EU’s finances have deteriorated. Germany is no longer prepared to bankroll the EU as generously as it once did: the fractious coalition in Berlin needs all the money it can get just to survive. Meanwhile, Le Pen has pledged to reduce France’s EU budget contributions. If she succeeds, other European nations will have to pay more; if she does not, she will almost certainly block anyone else from getting a rebate. I cannot conceive of any political constellation that would allow for Britain to rejoin on the cheap. 

In fact, according to my calculations, Britain’s annual contributions to the EU budget would be around £30 billion in today’s money if it were to rejoin. That’s about half of the UK’s entire defense budget. How would Chancellor John Healey pay for this: by cutting defense or welfare spending, or else by raising VAT? Pray tell! 

You might now accuse me of knowing the price of everything and the value of nothing. So let’s talk about value for money. For the most part, Britain’s EU contributions would not go toward investments, such as cross-border railways, hyperscalers, or nuclear fusion. Instead they would be redistributed to other member states. Where is the value in that? 

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There’s another, even bigger obstacle to Britain rejoining the EU: Artificial Intelligence. What almost nobody engaged in the Rejoin debate is thinking about is the sheer extent of the EU’s anti-tech crusade. Since Brexit, the Luddites in Brussels have passed a large number of laws seeking to control the spread of digital technologies and impose their will on the global tech industry. Of these, the 2024 AI Act would be particularly damaging to the UK’s prospects. The European attitude to AI is best exemplified by the German media, which only ever publishes news stories that emphasize the dangers of AI. It views AI as a means through which evil American entrepreneurs could destroy European culture. 

Of all the policy mistakes the EU has made over the years, its tech legislation must be both the most stupid and the most significant. The EU believed in the story that it kept telling itself: if America was an innovation hub and China a manufacturing powerhouse, then Europe was the global regulator. For sure, it used to be. But that was only because world-leading European manufacturing companies, such as the German car makers, set standards for the rest of the industry. Today, by contrast, only four of the world’s 50 largest tech companies are European. The EU has lost the AI race and as a result it has no leverage in the global debate over how AI should be regulated. That debate is limited to Anthropic, OpenAI, the US government, and to some extent China.

Unlike the EU, the UK is a player in AI — albeit a small one. Brexit was not an economic success story overall: in fact, I’d call it a macroeconomic non-event. But AI was a silver lining. Last year, AI investment in the UK took off. This year, the UK poured more capital investment into AI than the whole EU; in a few years’ time, it will probably have invested even more.

Yet if the UK were to rejoin the EU, it would have to sign up to all of Europe’s tech regulations, including the onerous AI Act. If that happened, all current and future investments into UK-based AI firms would be at risk. There is no way the EU would allow the UK to maintain its liberal regulatory regime and become Europe’s only technology hub. And I struggle to imagine a UK government voluntarily strangling what could eventually become the country’s most successful industry.

Given the way the EU is run right now, the UK cannot conceivably return. But Burnham has reduced the question of rejoining to shallow identity politics. The EU is an abstract placeholder for progressive multilateralism. Many of the loudest advocates of EU membership think of business in terms of clichés: they insist, for instance, that business always benefits from the single market — but for many industries including AI, that is just not true. I don’t imagine that many Rejoiners are considering how EU membership would affect the fledgling London-Oxford-Cambridge tech triangle. To do so would upset their lazy narratives. 

In the end, I felt the same way about Leave and Remain as Henry Kissinger felt about Iraq and Iran. He wanted them both to lose. Now, I feel just as pessimistic about Rejoin.

In Musil’s writings, I see parallels with today’s Europe. Our time, too, might one day be known as a pre-war era. After all, if Germany was the up-and-coming power in 1914, China is today. The UK was then the biggest global power, like the US today. The equivalent of the Austro-Hungarian Empire in 2026 is Russia: a once-great power in terminal decline.  In hindsight, one of the omens of the First World War was the emergence of political and military alliances that were intended to protect but which ended up becoming conduits of war — such as Germany’s alliance with Austria, Russia’s with Serbia, and France’s with Russia.  

The alliance between the EU and Canada — which was strengthened last week, when the EU proposed that Canada somehow become its first “associate member” — is militarily not as consequential as those that led Europe to the killing fields. Yet it has something of their essence. It has a certain Musil-like quality too — just another parallel campaign in a world soon to be extinguished.

Mark Carney likes giving spine-stiffening speeches in defense of the passing multilateral order, while Ursula von der Leyen, president of the European Commission, poses for as many photos with Volodymyr Zelensky as possible. But surely, like Musil’s dreamers, both Carney and von der Leyen have more important things to do? For the EU is not a global power, but something much more down to earth: a customs union and a single market, plus a monetary union among most of its members. These three functions are the only ones that ever mattered. Yet instead of focusing on the EU’s core economic problems, where she has the power to bring about change, von der Leyen is engaged in a performative dance with Carney. 

The Canadian prime minister, too, has unresolved problems at home. Canada’s biggest trade barrier is not the one with the US, but its own internal system. Canadian provinces are like medieval European fiefdoms, imposing trade barriers against each other. It is a vast country, but it is not a single market. Why not solve that problem first?  

So the issue with the EU-Canada pact is not so much that it is wrong, but that it is vacuous, or, as, Musil would put it, without qualities. In 2014, the EU and Canada signed a trade deal, the Comprehensive Economic and Trade Agreement, or Ceta, which took provisional effect in 2016. Ten years later, this treaty is still not formally approved, because 10 EU countries, including France and Italy, have refused to ratify it. If you are really interested in solidifying the EU-Canada relationship, would you not start there? My theory is that von der Leyen and other politicians are simply bored with the single market, and find a G7 or G20-type set up far more glamorous.  

The UK-based European Council on Foreign Relations, together with the Netherlands-based European Cultural Foundation, recently published a poll that found 70% of Europeans were euroskeptic. I was not in the least surprised by this result, but it came as a shock to the authors, who subsequently recommended that the EU engage in even more performative stunts. They wrote that to foster pro-European attitudes, Brussels should harness “the power of future nostalgia, or a longing for a time when a better future seemed within reach”. In other words: keep your eyes off the ball for a little while longer, while appealing to our glorious past.  

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The stunt with Canada is about exactly that — nostalgia for the age of globalization that has now vanished. Canada and the EU entered the new era of globalization as second-rate powers, led by third-rate politicians, but they ended up being the big winners. I still recall the uncritical British deference to Carney when he arrived as governor of the Bank of England. He was the highest-paid central banker in the world at the time: apparently he needed the money to send his children to a private school. This all happened in 2012, an age when non-doms, now an extinct species, roamed the streets of Mayfair. This is the world Carney wants to return to — the world he knows. 

The obvious problem with Canada’s aspiration to become an “associate member” of the EU is that no such membership exists. Veterans of the Brexit debates may recall that the EU only offers a fixed number of external relationships — and Canada currently has the same deal as the UK (except with more maple syrup).

Nor is full Canadian EU membership possible, since membership is limited to European countries only. The 10 member states that refused to ratify the Ceta trade deal will almost certainly not ratify that EU-Canada association agreement. So what are Carney and von der Leyen even discussing? 

There are ironies here too. I found it deeply comic when I recently heard Carney speaking about sending a special envoy to the EU to discuss co-operation on areas including AI and defense. There is practically no AI work going on in Europe — except for lots of people hyperventilating about US tech companies. Besides, Nato, the defense alliance that ties Canada and most EU countries together, already exists. In other words, there is absolutely nothing in this hot-air balloon of a “pact” that could not be had down here on Earth. (And no, you don’t need an alliance to relax restrictions on freedom of movement.)

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If the EU and Canada were really serious about safeguarding their waning global influence, perhaps they should start by addressing their joint dependencies on the US in a more strategic way. Canada and Europe both run large and sustained current-account surpluses against the US. The two nations have built industrial structures on the assumption that the Americans would forever tolerate the trade deficit and global imbalances that sustain them. Even in the highly unlikely scenario that Canada were to gain full EU membership, this would not reduce its dependence on the US for imported goods. 

On my list of the 10 most important initiatives the EU needs to take right now, in other words, a closer relationship with Canada doesn’t even feature. Instead, my top suggestions would be for the EU to reopen the closed diplomatic channels with Moscow to ensure that it plays a role in the governance of post-war Ukraine; to recognize the dangers of a financial crisis that over-indebted European countries like France have exposed themselves to; to ditch the anti-tech regulation and many other bureaucratic hurdles the EU has imposed on business in the last decade; and to create a fledgling capital-market union, so that Europe’s large pool of savings are channeled into domestic investments. I can think of many more ambitious things, but that would be a good start.  

Besides Canada’s “associate membership”, fast-tracking Ukrainian EU membership is the other delusion of European politics. The EU does not have the money for it. And Ukraine is moving further away from meeting the formal criteria for joining, sinking deeper and deeper into corruption. Neither von der Leyen nor Zelensky are doing the work to change things. Instead, they are content merely to act upon the world stage. And that’s what this is really about: acting. If only Musil were alive today: he would have a lot of fun with these characters without qualities, and their mystifying parallel universes.

It just turns out that digital capitalism is a cruel game of gatekeepers and first-past-the-post market power. France, like the European Union as a whole, remains as embedded as ever in a digital economy lorded over by Silicon Valley. Today, it’s a reality best represented in the €264 billion deficit in digital services whisked out of the EU common market by US corporations. The legacy German software company SAP, Europe’s largest tech sector “champion”, is middling compared to its American peers. Artificial Intelligence hopefuls like France’s Mistral AI do make headlines. But they remain blips on the chart next to the leading California and even Chinese firms.

Still, it was no doubt with an eye to his legacy that Macron early this summer sought some sort of victory, albeit in the far less glamorous business of data centers. In June, Japanese lender SoftBank duly announced a €75 billion spending spree on French data-center capacity, spelling a roughly five-gigawatts surge in computing power. And, for Macron, this is proof that France is at last making inroads in scaling up the infrastructure that defines Europe’s tech sector, especially given his country’s relative strengths elsewhere. In OVH Cloud, for instance, the country already boasts one of Europe’s largest homegrown cloud and compute providers, and this on a continent where Amazon, Google and other US “hyperscalers” control some 70% of the market. But France’s real trump card is energy. In 2022, Macron announced a significant expansion of the country’s arsenal of nuclear power plants — even if that now seems set to be gobbled up by the gargantuan demand-shock for electricity from data centers.

Digital infrastructure can, of course, be sized up by processing power — in terms of the raw quantities of data being handled. These are the sweatshops of the big data age, tasked with storing, processing, and sifting the masses of information on which AI foundation models run. But they are also measured by what they consume, whether that’s the sophisticated chips in their servers or the tons of rare metals required to manufacture them. As for energy, those newly announced data centers are predicted to consume the equivalent of 10 nuclear reactors.

Sooner or later, then, France’s data-center euphoria will be forced to contend with a tight knot of contradictions. Many of these are inherent to the technology itself, already clear in the way limited water resources and strained electricity markets are driving local pushback to data centers in the US. With French planners giddily talking of reindustrialization by data center, these tensions can be expected to repeat themselves.

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For now, however, with local opposition still sporadic, planners and operators see few reasons not to accelerate. Public utilities like electricity producer EDF, which was re-nationalized in 2023, or the transmission operator RTE, are promising “fast-track” hooks up for operators. Recent state decrees, alongside an omnibus deregulatory package adopted by parliament this spring, are aimed at speeding up groundbreaking, removing permitting powers from municipalities and even curtailing the possibility of public reviews.

Warnings of an AI bubble be damned: in France, data centers now bear the stamp of a national cause. Macron, for his part, would no doubt like the investment push to be seen as one of the so-called “grands projets” periodically undertaken by French presidents since de Gaulle. Just as France’s independent nuclear deterrent ensured dignity in the Cold War, and civilian nuclear power protected the country from energy shocks in the Seventies, data centers are being touted as a way of resisting Europe’s digital colonization by the so-called “GAFAM”: the French acronym for Google, Apple, Facebook, Amazon and Microsoft. On paper, at least, it’s a seductive story, even if the French public has yet to take much measure of the commitments being made in its name.

Yet cutting dependence on Silicon Valley is far harder in practice. It’s no coincidence that Macron and his allies have long pushed for a more assertive tech policy from the EU, one component of the French President’s broader calls for “strategic autonomy” vis-à-vis Washington. In recent years, though, this position has been in the minority. A first wave of EU tech legislation — from 2016’s GDPR rules, to the Digital Markets or Services Acts of 2022, and the AI Act of 2023 — put some limits on the worst abuses of the tech majors: while also punting on the comprehensive industrial policy needed to make up for Europe’s technological lag. One reason for this continued caution? Donald Trump’s eagerness to come to the defense of US tech giants in their regulatory skirmishes with Brussels.

So are the winds shifting in Paris’ favor? On the heels of the investment surge in France, Brussels announced a new “tech sovereignty” package that supposedly has the bloc reclaiming “its place in the global race for geoeconomic power”. European institutions are also preparing a “Cloud and AI Development Act”, with the goal of tripling data-center capacity by the early 2030s and scaling up of European-based companies across the tech economy. A new Chips Act purports to reinforce EU production and supply chains for advanced microprocessors.

For boosters, this is a sign that Brussels is finally taking the geopolitics of technology seriously. And this summer, Macron’s government also announced it would phase out its contract with Peter Thiel’s Palantir, replacing the American military-tech company’s software — used by French intelligence services since 2016 — with a model created by French startup ChapsVision.

All the same, pressure remains not antagonize Washington. Weeks after introducing its tech sovereignty package, for instance, the European Commission in late June signed up to the Trump administration’s so-called “Pax Silica” alliance on the critical minerals and chip supply chains needed for AI. “There is a case to be made for more compute capacity that is sovereign and located in Europe,” says Giorgos Verdi, a policy lead with the Europe branch of Open Markets Institute, an anti-monopoly think tank and advocacy group. “At the same time, it’s very important to define, before rushing into the craze of data-center build outs, what this sort of capacity is used for.”

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When it comes to Europe’s tech ambitions, separating fact from myth is not always easy. That goes for the much vaunted, and just about always inflated, jobs figures supposedly stemming from the opportunity at “reindustrialization” represented by new sites. It also goes for the use of the new compute capacity itself, which on its own will do little to dent the structural advances of Silicon Valley.

With or without that new processing power, meanwhile, the fundamental problem remains US control over the commanding heights of the digital economy. Lou Welgryn, president of the Paris-based Data for Good, tells UnHerd that a mad rush for data infrastructure could “reinforce dependence on actors that dominate the technological core”. Without European alternatives further up the value chain, expanded compute capacity will merely service the same corporations that already control the digital economy today.

Just follow where the capital flowing into European processing power is coming from, with US tech majors present, either directly or through local partners, in many of the largest data-center projects. As Masayoshi Son, SoftBank’s CEO, has pointed out, his bank’s data-center spree simply involved aggregating various capital sources — and working closely with an unnamed “hyperscaler”. According to a French senate report published last month, a mere 1.4 gigawatts of 15 gigawatts of projected data-center investments is of European origin.

There are other ironies here too. What Welgryn calls “digital sobriety” seems to be heading for the dustbin of history. But amid an ecological crisis, and a cost-of-living crunch that shows few signs of receding as the leading preoccupation for French citizens, what of the so-called “energy sobriety” that was, until quite recently, held up as a societal totem?

A big-data blitz will only add to simmering tensions over stretched water resources; rage over rural water reservoirs, built in the interests of agro-industry, has already sparked battles between protestors and riot police. This summer’s historic heatwave has rivers like the Loire almost running dry, even as wildfires rip through swathes of French countryside. One recent report classifies as “high risk” the environmental exposure of at least a quarter of French data-center projects. From climate “resilience” to data sovereignty, a lot seems to be riding on the panacea of limitless nuclear energy.

Macron’s closing gesture towards strategic planning ought to have been the chance to strike a balance between these mounting constraints and conflicting priorities. Tech sovereignty today surely needs a material infrastructure, but it cannot just be about opening the electrical spigot to Silicon Valley. Who knows, it could even be about placing some hard limits on big data itself. Until then, France and Europe risk being pigeonholed into a developmental path that just means taking on more of the dirty grunt work of the digital economy. If, or rather when, a data-center backlash comes, Macron’s successor can expect to have their hands full.

The most consequential provision is without doubt the 16th Amendment to the constitution, which imposes a lifetime term limit of eight years (two parliamentary terms) on the prime minister. Effective retroactively, the measure is obviously targeted at Viktor Orbán. Given he’s already served for a total of 20 years, the new law bars him from ever returning to office. Quite apart from its nakedly ad hominem character, which critics have already dubbed the “Lex Orbán”, the provision has no defensible logic. Why should voters be prevented from re-electing a leader, or rather a parliamentary majority that supports him, if they choose to do so? Indeed, virtually no parliamentary democracy — where, unlike in presidential systems, executive power is shared with a cabinet and remains fundamentally dependent on maintaining a parliamentary majority — imposes a term limit on the head of government.

But the new government didn’t stop there. Another provision, the 17th Amendment, sets a 12-year term limit for members of parliament. Again the ad hominem — or in this case ad partem — nature of the law is clear. Conveniently, no sitting MP from Magyar’s Tisza Party is affected: only the opposition. Fidesz and its allied party KDNP, having dominated frontline politics since 1990, stand to lose their entire senior cadre. One might call this Lex Fidesz, though other parties are caught in the net as well. The blow falls equally hard on the political Left, disqualifying most of its veteran figures and rendering a progressive resurgence all but impossible.

Equally striking is the manner in which the new government ousted the incumbent president, Tamás Sulyok, who had been elected by the previous parliament in February 2024 and whose term was supposed to run until 2029. Magyar, who accused Sulyok of being an Orbán puppet, targeted him from the moment of his victory speech and did everything possible to force him to resign. When Sulyok refused to step down, the new government could have initiated an impeachment procedure, the only mechanism for removal provided for by the Fundamental Law.

Instead, Magyar chose simply to slip a line into one of the constitutional amendments which literally reads: “the term of office of the incumbent President of the Republic terminates today”. Meaning: removal by legislative fiat, what we may call Lex Sulyok. Even Amnesty International Hungary criticized the constitutional coup aimed at unseating the president. It is worth noting that Sulyok also appealed to the Venice Commission, the Council of Europe body that advises states on constitutional and rule-of-law questions, to review the amendment. The Commission’s reply, following a brief trip to Hungary? That it would rule on his motion at its next plenary session in October, neatly coming months after his removal.

The judiciary has not been spared either. Magyar’s 17th Amendment reintroduces a mandatory retirement age of 70 for Constitutional Court judges, effectively removing the chief justice and three other judges, and handing Magyar the opportunity to flip the political balance of the court within his first term. The same amendment further establishes a new body, the National Office for Asset Recovery and Asset Protection, tasked with “the tracing and recovery of public assets that have been unlawfully managed or used” by the previous government. Creating a body to investigate alleged corruption might not seem particularly nefarious: until one realizes that Hungary, like every European country, already possesses institutions devoted to precisely this purpose.

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What makes this one unique is that it’s charged solely with investigating the alleged wrongdoings of a single party — Fidesz — outside judicial and societal oversight. As András Schiffer, the former leader of the green party LMP, put it, the body’s aim is to “make it morally impossible for Fidesz to compete through a series of trials — spiced with staged theatrical performances — and inquisitorial proceedings”. The new government’s decision to join the European Public Prosecutor’s Office (EPPO), itself a highly politicized body effectively operating under the Commission’s control, will only reinforce this.

Magyar has defended these actions by invoking “the exceptional mandate received from the electorate” and as a “precondition for the restoration of constitutional democracy”. The new prime minister’s argument is simple: since Orbán created a “mafia state” that trampled the rule of law, its restoration requires the complete destruction of the Fidesz system. The constitutional amendments, indeed, are only part of a much wider offensive, which includes shutting down the news output of the public media; closing Fidesz-aligned cultural institutions such as MCC and the Danube Institute; and launching a judicial raid on the offices housing Fidesz’s servers to seize its databases, taking the party’s website offline (it still is at the time of writing). For their part, Orbán and his party have accused the new government of dismantling the rule of law, eliminating the system of checks and balances, and persecuting the opposition — of creating, in essence, precisely the authoritarian regime that the liberal establishment always accused Orbán’s government of being.

My purpose is not to convince you that Orbán is right. It is rather to reflect on what the post-Orbán transition tells us about the vanishing meaning of words like “rule of law”, “democracy” and “tyranny” in our post-everything age — and to highlight some of the contradictions within both the liberal and the Orbán camps.

Let us start by clarifying that, technically speaking, the new government’s measures are not illegal. Post-communist Hungary has always been defined by what might be called a hyper-parliamentary system: simply put, a government with a two-thirds majority can amend the Fundamental Law, or even replace it wholesale, in a single chamber, in a single vote, without facing any substantive review by judges. A two-thirds majority also controls the so-called “cardinal laws” — electoral rules, media, judiciary, central bank — and key appointments like constitutional judges and the prosecutor general. The Hungarian parliament thus faces far fewer obstacles in its legislative functions than most of its European counterparts, where constitutional revision tends to require multiple votes, referendums or even general elections. In Germany, certain constitutional fundamentals are outright unamendable — permanently beyond the reach of any parliamentary majority, no matter the size. In Hungary, by contrast, a government with a two-thirds parliamentary majority faces effectively no institutional veto at all.

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Orbán himself mastered this institutional logic better than anyone before him — and in fact reinforced it after 2010, severely curtailing the Constitutional Court’s power to review constitutional changes. The following year, Fidesz then used its own supermajority to adopt an entirely new constitution, redefining the country’s constitutional identity in explicitly national-conservative terms. From there it expanded the court from 11 to 15 judges, handing itself the opportunity to immediately pick four new justices, even as it consolidated a powerful pro-government media machine.

In this sense, you can argue that Magyar is simply following the democratic logic established by Orbán: that a government with a strong mandate should be free to implement sweeping changes that reflect the popular will, and use its constitutional majority to entrench the ruling party’s political interests. Somewhat ironically, Tisza itself benefited from Orbán’s 2011 electoral reform, which raised the share of single-member constituencies from about 45% to 53%, boosting the majoritarian, winner-take-all component of the system. As a result, Tisza’s 53% of the vote translated to roughly 71% of seats. Certainly, Fidesz’s accusation that Tisza is “dismantling the rule of law”, “eliminating the system of checks and balances” and “destroying the legitimacy of independent institutions” rings rather hollow — even as it mirrors the accusations the EU establishment directed at Orbán for years.

All the same, it is true that Tisza has crossed red lines that Orbán never dared to cross: no previous government, for instance, had ever ousted a sitting president by decree. In this sense, some of the new government’s actions, while not technically illegal, undoubtedly violate well-established constitutional principles — such as the inviolability of the president.

But are we sure this is a principle worth defending from a popular-democratic perspective? Setting aside the specifics of the Hungarian case for a moment, the reality is that many of the “independent” institutions that make up the edifice of modern liberal democracies — presidential offices, independent central banks, constitutional courts and the like — do not limit themselves to “upholding the constitution and the rule of law”. Rather, they pursue their own political and institutional logic, independent of that declared or pursued by the political leadership of the day, and more often than not reflective of entrenched elite (and increasingly supranational) interests. Supreme and constitutional courts, for example, frequently rule against government policies — especially when it comes to controversial issues like immigration. The way in which the Bank of England derailed Liz Truss’s infamous mini-budget is arguably another example.

In other words, they exist to limit the popular will — and indeed routinely rule against elected governments — according to the logic of what we might call “constrained democracy”. This is obviously not to claim that there should be no limits whatsoever on an elected government’s actions. But the current model is deeply flawed — and in this sense the fact that Hungary’s system is much less constrained than elsewhere should be viewed as a positive thing.

Returning to the Hungarian case, then, can we really blame the new government for not wanting to spend four years contending with a president appointed by its predecessor? And if the roles were reversed — if Fidesz had won a two-thirds majority and found itself saddled with a staunchly pro-EU president — would conservatives blame it for wanting to get rid of him? After 2010, indeed, Orbán made sure to appoint presidents aligned with his government’s agenda, and I would argue that this made perfect sense from a popular-democratic standpoint.

Ultimately, then, I would claim that the new government’s measures should not be challenged on procedural grounds — with arguments that often echo those the EU establishment deployed against Orbán in the past — but on their substance. The real question is what the government’s measures are for, not how they are done. And on this point there is little doubt: they are aimed at essentially destroying the opposition in Hungary — at making sure Fidesz never returns to power — and thereby “locking in” Hungary’s EU-dictated economic and foreign policy agenda forever.

What that agenda entails is no mystery. It means dismantling Orbán’s heterodox economic model — starting with price caps and energy subsidies, and which the new government has already started to unwind. It also means phasing out Russian oil and gas, whatever the cost to Hungarian households and industry. And above all it means full alignment on Ukraine: within weeks of taking office, Magyar had lifted Hungary’s veto on the European Peace Facility, the Orwellian-named off-budget fund through which the EU, whose own treaties bar its budget from financing military operations, reimburses member states for weapons shipped to Ukraine. At the same time, Hungary no longer now opposes opening accession talks for Ukrainian EU membership, with Magyar further signalling that he would no longer block sanctions against Russia.

Beyond the policy questions here, there is simply no way this brazen attack on the opposition can be defended on democratic grounds — and indeed Orbán himself, for all the EU establishment’s claims about the allegedly autocratic nature of his government, never dared to legislate his opponents out of existence. This brings us to the contradictions of the liberal camp. Because regardless of what one makes of liberal-democratic dogmas, there is no doubt that the Magyar government’s measures represent a blatant violation of the rule of law as defined by Brussels itself. It is remarkable watching the EU establishment, which spent a decade and a half accusing Orbán of being a proto-dictator on “rule-of-law” grounds, now reward much graver violations by the new government.

Indeed, the EU’s main response to Operation Purgatory has been to unblock €10 billion in post-pandemic funds which Brussels had blocked Orbán from receiving. Nor is it just the EU. Hungary’s liberal legal scholars — the same experts who spent years cataloguing Orbán’s every constitutional sin — have proved remarkably accommodating now that the shoe is on the other foot. As one of them put it on Verfassungsblog, the house organ of European rule-of-law orthodoxy: since “the previous legislator has obviously violated the fundamental values of the EU”, and the new majority is “laying the foundations for a new republic, committed to EU fundamental values”, it follows that “the swift removal of the head of state is, exceptionally, acceptable”. In other words, the rule of law may be suspended, provided it is suspended in the name of the rule of law — and, crucially, in the name of “EU fundamental values”.

We have seen this film before. After coming to power in Poland in 2023, the pro-EU coalition led by Donald Tusk launched an unparalleled attack on the rule of law: seizing control of the public media and the judiciary, sidelining constitutional norms and undermining institutional independence. Yet as in Hungary today, all this was met with silence or enthusiasm in Brussels — in that case as well, funds that had been frozen for years were rapidly released. All of which is further confirmation that the European Commission’s insistence on democracy, values and the rule of law is, more than anything, a convenient pretext for targeting dissenting governments that resist aligning with the EU’s expanding supranational authority and broader political agenda. Indeed, when it comes to supporting its own emissaries, there is apparently no red line the EU will not cross — up to and including greenlighting the outright annulment of entire elections when they go the wrong way, as we saw in Romania in 2024. As for Hungary, the strategy seems clear: the EU is bent on punishing the rebellious colony — by making sure it can’t rebel ever again.

The President may not have been serious about the lettuce tariff, but he is serious about tariffs in general. “Tariff,” he once said, “is the most beautiful word in the dictionary.” They are the one-size-fits-all economic policy tool of his administration.  

After he menaced Mexican salad, Trump turned his attention to a far more serious parasite — the EU, which he once described as having been created to “rip off America”. Again, he threatened new tariffs, only this time he was not joking. The trigger was a decision by the European Commission to impose two fines on Google totaling $1 billion. The Europeans accused Google of failing to comply with the Digital Markets Act, which forces US tech giants to open up their proprietary ecosystems to competition. Google was prioritizing its own search engine over others. This was not a one-off. The Europeans are messing heavily with the business models of lots of the US tech giants, not just Google. There is another European law, the Digital Services Act, which forces platforms like Facebook and X to moderate their social media content. 

All of this has wound up the American President. In retaliation, Trump wants to impose his new tariff on Europe “at the earliest possible moment”, arguing that the EU is robbing US companies of their legitimate profits. I don’t think this is a bluff. Unlike when he imposed his “Liberation Day” tariffs, existing US trade law allows him to do this. It could take up to a year, but this time US law will be on his side.  

When the US Supreme Court struck down Trump’s Liberation Day tariff regime in February, the Europeans got a bit overexcited. Some assumed it was a decision against tariffs in general. That was not the case. The Supreme Court declared the legal basis on which Trump had based his Liberation Day tariffs as null and void. But Trump has other legal avenues open to him. 

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The American disaster

By Jonathan Sumption

Immediately after the ruling, the Trump administration made two decisions. The first was to implement a temporary regime that allowed the President to impose tariffs of up to 15%, no questions asked, for up to 150 days. That meant the old tariffs would continue for a few more months. That deadline has now expired. The second was to launch an investigation under Section 301 of the 1974 Trade Act against practically all countries in the world. The idea was to resurrect the old tariff regime — one for one — under a new legal cloak. 

Section 301 is a formal, tried-and-tested procedure. The actual investigation, however, was absurd. The US accused nearly every other country in the world of failing to match its own human rights standards with respect to imports of goods produced by forced labor. It is quite something to behold the US accusing Norway of not respecting the highest human rights standards. Rarely before has Section 301 been applied so cynically: the human rights accusations were just a front to resurrect the old, defunct tariff structure. 

Still, I believe it will pass the legal test anyway because of the separation of powers under US law. It is not the role of a court to decide whether a foreign trading practice is illegal. The courts decide whether the decision followed due process. 

From now on, Section 301 will be the legal basis for all of Trump’s tariff policies. That means if he wants to impose heavy tariffs on the EU in response to the fines on Google, he could do so — perfectly legally — by early next year. The EU may drag this out a bit, but I would be surprised if the US legal system ended up siding with the EU on this matter.  

When the Supreme Court ruled in February against the Liberation Day tariffs, the average US tariff was about 15%. It has come down a bit since but will now creep up again as the tariff regime hits. In the two-and-a-half years Trump has left in office, I expect average tariffs to rise to above 15%. Trump will always find ways to impose new tariffs, like the one he threatened last week.  

Have the tariffs made world trade any fairer? Have they contributed to a reduction in global trade imbalances? Absolutely not. But they are not without effect. The most important is that they are raising around $200-300 billion per year in revenue for the US Treasury. Tariffs are, formally, a tax on US consumers; but exporters from other countries are paying indirectly. The value of Japanese cars sold in the US fell by 24.7% in May last year, compared to the previous year. Yet the number of Japanese cars sold was down only by 3.9%. So the Japanese car companies took a hit on their profits.  

Companies that refused to cut export prices have seen a fall in sales. Among these are the Chinese online retailers Shein and Temu, both of which specialize in small items that were once exempt from tariffs. They could post their tiny packages to America because of the so-called de minimis rules — a tariff exemption for goods below a certain price. The week after Trump imposed his tariffs, and ended the de minimis exemptions, Shein observed a 23% fall in its US revenue compared with the preceding week. During the course of 2025, the Chinese trade surplus against the US fell by one third. 

So the tariffs did have an effect. But only on the bilateral US-China trade balance. Globally, trade imbalances are still rising. The Chinese have diverted trade from the US to the EU. As a result, the EU’s trade deficit with China increased dramatically. In first six months of this year, it was up by 23.9%.

The EU, in turn, is considering imitating Trump by imposing a tariff to protect European industries from Chinese competition. Remember the European outrage when Trump did this? Trump had a better case back then than the Europeans do now. The US runs a large trade deficit against the rest of the world, whereas the EU runs a persistent surplus. If the EU were to take a tougher stance on trade with China, I would expect China to react by cutting down on European imports and restricting sales to European companies whose supply chains depend on China. Last week, China extended the list of European companies earmarked for export controls to include Rheinmetall, the German defense producer. If we end up with a tit-for-tat trade war, the world will be worse off. 

Macroeconomists have long warned us not to focus on bilateral trade balances, but instead to think globally. Trump cares about nothing other than bilateral trade balances. It suits the dealmaker in him. But if we become like him, and the Chinese keep on doing what they have been doing, it will be a lose-lose game for the world. 

The EU would end up as the biggest loser of all. This is because the EU, like China, runs trade surpluses; as global trade falls, it will hit the surplus countries more than deficit countries. At the same time, the EU is reliant on Chinese imports for its supply chains, for example in the car industry. A trade war would be a double-whammy: tariffs on European products, and supply shortage of badly needed Chinese rare earths and semiconductors.

A year ago, Trump and Ursula von der Leyen, the European Commission president, agreed a trade deal at Trump’s golf retreat in Turnberry, Scotland. It was an embarrassing moment for von der Leyen, as the deal was entirely dictated by Trump. The EU agreed to cancel all the tariffs it had previously imposed on the US, including a 10% car tariff, and accepted that the US would impose a blanket 15% tariff on all imports from Europe, and a 50% tariff on steel and aluminum. If Trump ends up slapping a new Section 301 tariff on the EU, even that deal would be off. The tariffs would rise. The EU would retaliate. Everybody would be in a trade war.

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Where’s the economic strategy, Andy?

By Wolfgang Münchau

When one also takes into account the rise in oil prices resulting from Trump’s escalating war against Iran, as well as the rise in public debt throughout the West, it is not hard to imagine a global financial crisis resulting from this mess.   

During the Covid pandemic, Trump suggested that chloroquine phosphate — the anti-parasite medication used for fish tanks — could work against the Covid virus. (I wonder whether he had been watching My Big Fat Greek Wedding.) The President himself was wise enough not to take it, but others did. At least one man died. Tariffs are the chloroquine phosphate of the economic world, and they too come with serious side effects. 

I expect Trump will get away with it, again. That’s because the US is less integrated into Chinese-sourced supply chains than the EU, and it is better at absorbing shocks. My advice for trade officials, and chemistry buffs: don’t try this at home. Let Trump be Trump.  

Brexit was an act of gross economic vandalism. Many Leavers understood that at the time. Most were indifferent. When push came to shove, an economic hit seemed, to those who thought about it at all, to be a price worth paying for autonomy. “Take Back Control” proved to be a winning formula. Ten years on, we are in a better position to decide how much control we have really gained, and how much it has been worth to us. Control and autonomy are legal and constitutional concepts, but their value depends on political realities. In a world of huge nations like the United States and China, it is in the interest of smaller nations to join together in powerful multinational blocs like the European Union (EU). Its members have more control and more global power collectively than they can ever hope to have individually. Britain’s own ability to exercise “control” over its own fate is inevitably more limited outside the EU.

***

The arguments about Britain’s relationship with Europe need to be considered in the light of our long-standing international priorities and current geopolitical position. These show a remarkable consistency. Britain is a European country, sharing the political, economic and intellectual culture of Europe in spite of important institutional differences. Engagement with Europe has been a strategic necessity for Britain for centuries. Ever since the reign of Queen Elizabeth I, it has been a consistent theme of British foreign policy to maintain a balance of power on the European continent and to resist the domination of the continent by any single power. This has been driven by a desire to influence the political priorities of European nations and to shape their policies in Britain’s own interest, something that is difficult to do if the continent is dominated by a single hegemonic power. 

Britain’s single-minded pursuit of this objective has involved the patient cultivation of European allies. Queen Elizabeth I landed armies in France and the Netherlands to contain the hegemony of Spain. In the 18th century, when France was the great European hegemon, British governments intervened to resist it with the support of powerful European allies. Britain was the only European power to challenge revolutionary and Napoleonic France throughout the period from 1794 to 1815, at a time when France occupied much of Europe. Britain’s long stand-off with 19th-century Russia, at a time when Russia occupied Poland and had ambitions in the Balkans, European Turkey and Central Asia, was guided by the same instincts.

The rapid expansion of a newly united Germany in the final decades of the 19th century presented Britain with a new challenge. In a famous memorandum of 1907, the Foreign Office mandarin Sir Eyre Crowe described Britain’s pursuit of a balance of power in Europe as “almost a law of nature”. His point was that now that the dominant European power was Germany, Britain must follow its traditional policy and contain it. In two world wars, Britain intervened to fight the Kaiser’s Germany and then Hitler’s.

For centuries, the bulwark of Britain was not the Channel, but the Rhine or the Oder. The concern was always that, faced with a dominant European power across the Channel, Britain would lose control over its own destiny. The policy was not simply strategic, but also cultural and economic. It was cultural because the long conflicts with, successively, Napoleonic France, Tsarist Russia and Imperial and Nazi Germany were seen as ways of confronting powerful despotisms and preventing the extinction of a liberal world order. It was economic because a Europe dominated by a single power would be in a position to disrupt British trade and finance as Napoleon’s continental system had sought to do. Historically, these instincts have served Britain well.

There has always been a contrary strand of British strategic thinking which rejected this approach. It can loosely be called Atlanticism, although the expression is geographically inaccurate, for it was based on a far wider view of Britain’s world than just the Atlantic. It stood for a policy of disengagement from the problems of the European continent and concentration on the wide oceans. It presented empire and the Navy as alternatives to Europe and the army. It has generally been associated with prominent figures in the Tory party. In his influential tract The Patriot King (1738), the Tory philosopher Henry Bolingbroke, who had been Queen Anne’s chief minister, articulated this view. He urged Britain to avoid getting involved in continental affairs. “The water is more properly our element,” he wrote, “and in it we find our greatest security.” William Pitt the Elder, although not a Tory, had once taken the same view. The Tory romantic Benjamin Disraeli said something very similar in 1866, and Churchill, a liberal at the time but a romantic Tory at heart, said it again in 1901. It was an unwise policy even then, and all three statesmen discarded it when they achieved power. 

Britain has rarely adopted a policy of “splendid isolation”, and when it has done, for example in the 1770s and 1780s or at the end of the 19th century, it has paid a high diplomatic and military price and has soon reversed course. European crises invariably become English ones. Reality dawns on statesmen when they find themselves having to grapple with the problems of international relations. Political disengagement from Europe has often been a slogan, but rarely a viable policy.

Atlanticism received a boost from the experience of the two world wars of the 20th century, which still have a dominant place in Britain’s conception of itself. Even before the United States joined the First World War, it contributed substantially to the funding of the British war effort and was a major supplier of munitions. Its contribution to Britain’s survival and eventual victory in the Second World War was decisive. The British Empire, and especially India and the old dominions of Canada, Australia and New Zealand, made a critical contribution in both wars. The world wars boosted a certain idea of British exceptionalism. Winston Churchill, who believed in the political unification of Europe but without Britain, encapsulated the idea in his History of the English-Speaking Peoples, published in four volumes between 1956 and 1958. This strongly romanticized account presented Britain’s relations with the “old” empire and the United States as a natural brotherhood distinct from its relations with continental Europe. It stood for the notion, common across the political spectrum in the Fifties, that Britain might act as the godfather of European union, but its own destinies were separate, maritime and global. 

Yet, if Atlanticism were ever a serious policy option, it was only so at a time when Britain could deal with the United States, if not as an equal, then at least as a comparable power. That depended on Britain’s status as a world power, the ruler of a global empire and a dominant economic force on the trade routes of the world. In the Fifties, when the European Economic Community was born, these conditions were ceasing to apply.

***

The creation of the European Economic Community and its subsequent transformation into the EU revived all the old geopolitical dilemmas of Britain, but presented them in a new light. British policy after the Second World War was dominated by an obsessive but ambivalent attitude to Germany. At the Anglo-American conference in Quebec in September 1944, the two countries agreed upon a policy of deindustrializing Germany so as to convert it into an economy that would be “principally agricultural and pastoral”. The allied occupation authorities drastically limited Germany’s mining and steelmaking capacity, dismantled its industrial plant, suppressed its industrial patents and destroyed the financial relationships between German banks which had been a major factor in Germany’s industrial strength. Britain encouraged the post-war reconstruction of France so as to serve as its bulwark against a reborn Germany. 

This policy of industrial containment was progressively abandoned from 1947, as the USSR, which was in the process of converting the states of Eastern and Central Europe into satellites, emerged as the principal threat to European peace. In the Fifties, however, the old fear of Germany returned as a result of the spectacular speed of German economic reconstruction. In the course of the decade, West German industrial production increased by a factor of two and a half. Measured by gross domestic product (GDP) per head, West Germany overtook Britain.

The European Coal and Steel Community was founded in 1951. The Messina Conference of 1955 decided in principle to create a Common Market of the six states of the West European continent. The Treaty of Rome gave effect to that decision in 1957. Britain and France both feared a revival of German power, but took precisely opposed views about the implications of these decisions. France regarded European integration as a means of binding an economically powerful Germany into a European bloc which they were confident that they could dominate. France also believed that only an integrated European bloc would be able to stand up to the United States. Britain, on the other hand, accepted the dominant role of the United States in the post-war world order, but believed that the objectives of the six founding members of the Common Market necessarily implied an eventual move to a European federal state dominated by Germany. The prospect rang all the alarm bells that had terrified British statesmen for 500 years. In a memorandum of February 1956, Harold Macmillan, then Chancellor of the Exchequer, declared that the Messina proposals “will mean Western Europe dominated in fact by Germany and used as an instrument for the revival of power through economic means. It is really giving them on a plate what we fought two wars to prevent.”

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Although the prospect of a dominant Germany was a particularly sensitive point, the problem would have been the same whether Germany dominated the new group or not. A supranational state comprising the whole of Western Europe would inevitably marginalize Britain. The only solution would be to join it, a possibility which was rejected out of hand. It was rejected partly because Britain was unwilling to subsume its own sovereignty in a new proto-state and partly because of its preferential trading arrangements with the Commonwealth and the British Empire. Instead, the government tried to persuade Germany and France to abandon their plans and urged the United States to withdraw its support for them. It failed in all three cases. In 1956, Harold Macmillan regarded European integration as a recipe for the division of the world into three spheres of influence, American, Soviet and European. This was a profoundly unwelcome development for Britain, because British attachment to sovereignty would inevitably result in Britain’s exclusion, with dire results for its international influence. Two years later Macmillan, now Prime Minister, told de Gaulle that he was convinced that the Common Market would turn into the modern equivalent of Napoleon’s continental system, an economic and political weapon targeted against Britain.

***

These debates foreshadowed British arguments for and against Europe for the next 60 years. When Britain eventually did join the Common Market at the third attempt in 1973, there was none of the idealism which had motivated the continental founders of the European Economic Community (EEC). It was seen by the politicians as damage limitation and by the public as a mere trading arrangement. There were many factors involved in the decision to join, including the lackluster performance of the British economy in the Fifties and the growing dynamism of the European market. But the main geopolitical factor, especially in the eyes of Macmillan, was the desire to influence the development of Europe in Britain’s interest and to maintain Britain’s historic role in European affairs. As a result, fears about the loss of sovereignty on the one hand and exclusion from a dominant European bloc on the other continued to guide British policy under both Conservative and Labour governments.

For a time the dilemma was evaded. In the referendum on EU membership held in 1975, the case made for membership was entirely about trade, and not about political integration. The political leaders who made the case for EU membership fell into two groups. There were those who believed that the European aspiration to ever closer union was just rhetoric, and that it would never happen. This group has proved to be mistaken. And there were those like Edward Heath, the Prime Minister who negotiated British entry, who understood the direction in which the EU was bound to move, but believed that it would happen gradually, and that over the years a new European identity would be created which the British would accept. This group has proved to be over-optimistic.

In the late Eighties, all the old ghosts came back to haunt the governments of Margaret Thatcher and John Major. There was, first of all, the advent of Jacques Delors as president of the European Commission. Delors was a French socialist who presided over a rapid expansion of the competences of the EU. Under his influence, it moved into areas of social policy in ways which were extremely unwelcome to the Conservative governments of these years. Then came German reunification, which revived the old fears of German domination of Europe. France and Britain divided along the same lines as they had done at the foundation of the EEC. Thatcher was intensely suspicious and publicly fearful. President François Mitterand of France, after some initial hesitation, stuck to the traditional French policy of trying to neuter Germany by binding it into European political structures traditionally dominated by France. Finally, the Maastricht Treaty of 1992 provided for a single European currency. Monetary union was in effect a German concession to France’s integrationist agenda in return for French support for German unification. In Britain, the old geopolitical dilemmas now had to be confronted.

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Free speech is still worth fighting for

By Jonathan Sumption

The Labour government which took office in 1997 set out to mend fences with Europe after the years of abrasive relations under Margaret Thatcher and John Major. The new Prime Minister, Tony Blair, articulated the classic doctrine of British foreign policy. Citing four centuries of history, he declared that Britain’s destiny had always been to “help shape Europe”. “The fact is,” he said, “that Europe is today the only route through which Britain can exercise power and influence.” Enlargement of the EU was the one way in which Britain’s age-old pursuit of a balance of power could be continued. The Labour government continued the policy of its Conservative predecessors of supporting the expansion of the EU to the east, in the hope that this would create informal alliances with aspirant countries in Central and Eastern Europe and dilute French and German influence. The policy of enlargement was successful in one sense. The EU grew to 28 members by 2007, bringing the whole of the west and center of the European continent into its orbit with the exception of Switzerland and Norway (which accepted EU laws by treaty but declined full membership), and the Balkan states (all of which have current applications to join and are adopting policies converging with those of the EU). Yet, in another sense, the policy of expansion failed. The new members turned out not to have the diluting effect that Britain had anticipated. They quickly signed up to the integrationist agenda of the European Commission, except in the case of Hungary and, briefly, Poland. The solidarity of the enlarged community was spectacularly demonstrated by Britain’s inability to fragment the bloc when it came to negotiating the terms of its exit after 2016.

Britain’s dilemmas were encapsulated in the argument within the Labour government about the euro. John Major’s government had negotiated an opt-out from the single currency, but that resolved only part of the problem. The Eurozone would inevitably become a center of European economic decision-making in which Britain, as a non-euro country, would have little influence. Tony Blair wanted to join the euro for political rather than economic reasons. He believed that it would increase British influence in Europe and that it would help to create a European identity in Britain. As a political judgment, that was plainly right. It also reflected the long-standing traditions of British foreign policy. Economically, however, monetary union made little sense. The Chancellor of the Exchequer, Gordon Brown, supported by senior Treasury officials, believed that the issue should turn on Britain’s domestic economic interest and not on her classic pursuit of political influence in Europe. He considered that the UK should not adopt the euro unless certain exacting economic tests of economic convergence were satisfied. As an economic judgment, that was right too, and it was the view which prevailed. It was a seminal moment.

***

Britain’s traditional policy had been to maximize its influence in Europe in order to protect its own economic and strategic interests. By the end of the 20th century, the emergence of the EU as the dominant continental bloc meant that this could only be done from the inside. Viewed in this light, Britain’s withdrawal from the EU in 2020 marked the abandonment of five centuries of intelligent British statesmanship. Without Britain, the EU’s consolidation into a single political bloc, which Britain had always taken the lead in resisting, was likely to accelerate. At the same time, Brexit marginalized Britain, ensuring that it would have no voice and very little influence over the developing economic superpower. 

There is also a more general sense in which Britain’s departure from the EU was a misfortune not just for Britain, but also for Europe. It detached Britain from one of the most imaginative and fertile projects in the continent’s history. The institutions of the EU are unappealing: remote, undemocratic, bureaucratic and foreign. But the EU has transformed the continent’s economic fortunes. It has brought to states on its geographical periphery, such as Ireland, Poland and Slovenia, a large measure of convergence with the historically more prosperous countries of Western Europe. It has eased the emergence of Eastern Europe from dependence on the controlling hand of Russia, and helped to restore and sustain liberal democracy in the countries which disappeared behind the Iron Curtain in 1945. It has contributed to the maintenance of the longest period of peace in Europe’s history. 

British Cassandras have been consistently wrong in their forecasts, tinged with hope, that the EU would collapse under its own weight. They were wrong when they dismissed the project as utopian at its foundation in the Fifties. They were wrong when they said that it would be destroyed by the euro crisis after 2009. They have always underrated the political will to sustain it.

Inevitably, the consolidation of continental Europe has marginalized Britain and reduced its ability to control its own destiny. Announcing the terms of departure agreed with the EU in December 2020, the then Prime Minister Boris Johnson said that at 11pm on 31 December Britain would, among other things, “take back control of our trade policy”, “take back control of our waters, with this treaty affirming British sovereignty over our vast marine wealth” and “take back control of our laws”. These sentiments exhibit a rather primitive attitude to national sovereignty and the ways in which it may be used for national advantage. Entering into a multilateral treaty such as the treaties constituting the EU was not a surrender of national sovereignty. It was an exercise of national sovereignty, involving a partial surrender of autonomy, and therefore of control, in order to obtain advantages which the participants could not have achieved on their own: greater geopolitical weight and friction-free access to a market 10 times the size of their domestic market.

Take, by way of illustration, the emotive subject of fisheries, which is presumably what Boris Johnson had in mind when he spoke of “our vast marine wealth”. In theory, Britain could restrict all fishing in British waters to British vessels. It now has the legal right to do that. But practical realities are against it. About 40% of fish caught by British vessels are landed in the EU, and well over half of fish landed in Britain are exported, mostly to the EU. Moreover, most fish species migrate between British and EU waters. Collaborative arrangements with the EU are therefore required in order to manage fish stocks in the interest of both sides. Fisheries are an interesting example. Because of the high proportion of European fishing stocks located in British waters, it is one of the few issues on which Britain and the EU have comparable bargaining power. Yet this has proved to be of very little practical value.

Looking more broadly at Britain’s relations with Europe, the economic balance is even less favorable. The EU is Britain’s biggest as well as its closest trading partner. It takes about 40% of British exports, whereas Britain takes only about 10% of EU exports, substantially less than the United States or China. As became clear during the Brexit negotiations, Britain depends much more on the EU than the other way round. The political weight of the EU, the size of its market and the asymmetric nature of Britain’s relationship with it means that Britain is bound to be dominated by it whether it is a member or not. The EU sets standards and imposes rules with which Britain is economically bound to comply, even though it is legally a free agent. This has not changed since Brexit. The difference is that Britain now has no say in the standards and rules that the EU applies. A legal dependence has simply been replaced by a practical one. Influence has been traded away for nothing.

The idea that Britain can compensate for this by reorienting its trade towards other markets through trade agreements was much canvassed during the referendum campaign, but it has proved to be an illusion. Almost all the trade deals negotiated by Britain since 2020 have simply replicated the deals that Britain previously enjoyed through the EU. The rest (with Australia and India) are with geographically distant countries and are widely thought to have been dearly bought. The reasons are not hard to find. The move towards global free trade, which seemed so promising a generation ago, has stalled and in many areas has been reversed. Most other markets are at least as protectionist as the EU, and Britain has fewer levers to open them up. International bargaining in this field depends on economic weight.

In any trade negotiation, Britain can offer access to about 70 million consumers, whereas the EU can offer access to some 450 million, more than six times as many. We would have been better off negotiating as part of a coalition of 520 million consumers. The one exception concerns Donald Trump’s tariff wars of 2025. Britain was able to negotiate more favorable reliefs from the United States than the EU, mainly because of Trump’s political antagonism to the EU. How much of an advantage that is remains to be seen. Trump is an impulsive and wayward force in world politics, who will observe US treaty obligations for as long as it suits him and not a moment longer. In the short run, Britain cannot allow its economic fortunes to depend on a partner as erratic and unreliable as the United States has recently proved to be. In the long run, the United States is likely to revert to its traditional support for European consolidation, with an agenda in which Britain will have limited weight.

Trade flows are not everything. However, the trade-off between autonomy and collaboration raises dilemmas which affect British policy-making across the board. An ever expanding range of issues, both economic and non-economic, call for international cooperation, in which political weight counts. The EU’s member states have more control and more global power collectively than they can ever hope to have individually. Britain’s own relative position is likely to weaken in the next few years, as powerful pressures push the EU towards further European integration and ultimately towards the creation of a federal superstate. This is because Europe’s ambitions will be impossible to achieve without developing common political institutions superseding national governments in major policy areas. Obvious areas for consolidation include capital markets, fiscal policy, debt issuance, defense procurement and aerospace. There will be more technological joint ventures on a European scale, such as the Galileo Project for a European GPS system, to which Britain contributed both financially and technically before Brexit but from which it has now been excluded. There will be determined attempts to achieve European autonomy in financial markets, from which Britain’s financial services industries (currently accounting for 12% of its GDP) will be excluded.

***

This brings one to the critical question of the relations of Europe and Britain with the United States and China, the world’s current economic superpowers. Donald Trump is likely to add to the pressure for European consolidation. The foreign policy of the United States has passed into the hands of a man who is determined to use the economic and military power of the United States to demand of America’s traditional friends a relationship based on subservience and clientage rather than alliance and shared interests. Europe is unlikely to accept such a relationship, but, outside the EU, Britain may have no alternative. The end of Trump’s presidency in January 2029 can be expected to bring an end to his highly personal and eccentric style of government, but not necessarily to America’s belligerent outlook on the rest of the world. Insularity in foreign relations has deep roots in American politics. Trump himself made no secret of his plans during the presidential election campaign. It must therefore be assumed that a majority of the American electorate welcomed his destructive instincts. The same voters will be around in 2028. Those bidding for Trump’s mantle can be expected to offer them more of the same. The Democratic Party will no doubt offer a less confrontational style of government, but is unlikely to risk its electoral chances by promising to reverse what Trump has done. The ultimate result will be the disintegration of the current web of international alliances centered on the United States, and its replacement by new networks based on other centers of power.

In Asia, the alternative center of power is likely to be China. Seventy years ago, China’s GDP was smaller than Belgium’s. Today it has the second-largest economy in the world, with a combination of relatively cheap labor, plentiful natural resources and impressive industrial and technological skills that enable it to undercut other advanced economies. Under Xi Jinping, it has immeasurably expanded its geopolitical ambitions in the Asia–Pacific region and its economic reach worldwide. Xi’s China, like Trump’s America, looks for relations with other countries based on political clientage. This can descend, in China’s case as in America’s, into crude bullying. Its Pacific neighbors, such as Vietnam, the Philippines and Taiwan, and its African clients, such as the Democratic Republic of the Congo, Zambia, Angola, Djibouti, Kenya and Côte d’Ivoire, have learned this lesson to their cost. In Europe, meetings with the Dalai Lama, protests against China’s persecution of the Uyghurs or of democracy activists in Hong Kong, or official dealings with Taiwan are met with trade sanctions.

Integrated political and economic blocs such as the EU have a better prospect of defending themselves against the suffocating embrace of the United States and China. The EU has proved to be too fragmented to stand up effectively to the United States in the tariff wars of 2025 as China has successfully done. This was cruelly exposed when the EU’s program of countermeasures was undermined by ideological differences among member states, by the economic vulnerability of some of them and by their common dependence on the United States for the defense of Ukraine against Russia. Europe is likely to pay dearly for that weakness. Trump will come back for more. It is difficult to believe that subservience will remain the EU’s policy for long.

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In dealing with China, the EU has not faced the same difficulties and has been much more robust. Lithuania, for example, has been able to stand up to persistent Chinese bullying and trade sanctions provoked by its decision to allow Taiwan to open a representative office in Vilnius. This is because, although Lithuania is a tiny country, it is a member of the EU, which can hit back hard and has done so. The EU is China’s largest trading partner, with a volume of trade in 2024 eight times larger than the UK’s. Britain is not as well placed to resist Chinese pressure over, for example, China’s demand for a super-embassy on Tower Hill, the presence in Britain of Hong Kong dissidents or its universities’ freedom to study China’s human rights record.

The UK has traditionally made the American alliance the cornerstone of its foreign policy and has opted out of the political structure of the European Community. Britain’s “special relationship” with the United States has proved to be both a blessing and a curse. It was critical in the Second World War and in the Cold War. It still is critical to Britain’s security in the fields of nuclear weaponry and intelligence. But it has come at the price of distorting Britain’s view of itself and its place in the world. It has allowed the UK too often to turn away from the reality of being a regional European power some 20 miles off the French coast, with a European history, culture and sensibility. 

It has also encouraged Britain to forget that the United States is some 3,000 miles away and has a hard-nosed view of its own national interest. The special relationship helped lull Britain into taking a more detached view of moves towards European integration in the Fifties and Sixties than was in its national interest. It also offered the Brexiters an opening to argue in 2016 that Britain’s links with Washington might provide an alternative to its participation in an integrated Europe. By promising a quick bilateral trade deal (which never materialized), they suggested that Britain could abandon the EU with equanimity on the hardest of terms. Britain has now discovered that the American comfort blanket is threadbare. As a result, its subservience to the United States seems likely to be more complete and longer lasting than that of the EU.

***

It is of course possible that national ambitions among the countries of Europe will prise Europe apart again and prevent the economic and political consolidation that the continent needs. But Britain has too often counted on this happening, while “ever closer union” slowly became a reality. History has borne out Jean Monnet’s prediction that “Europe will be forged in crises and will be the sum of the solutions adopted for those crises”. 

Barring a major crisis in Britain’s own affairs, it is unrealistic to expect Britain to rejoin the EU. What is more likely is a succession of ad hoc agreements for cooperation with the EU in defined areas including economic regulation, international trade, migration, defense procurement and foreign policy. Europe will be in a position to dictate its terms. Some of these agreements will involve substantial British contributions to European budgets. Some will involve accepting the jurisdiction of the European Court of Justice in specific areas. The red lines of the past are likely to fade. In this untidy fashion, Britain will obtain a modest degree of influence over European policy decisions, but it will be substantially less than the control that we might have exercised as members.

***

Extracted from The Brexit Effect, 2016–2026, published by Cambridge University Press. 

Some of these spectators give the players and their team manager some really bad advice. They cheered Team EU when they were battling Donald Trump over his trade tariffs. I will never forget the headline in The Economist the week after Trump imposed his tariffs in April last year. Under the tag “Trade Fight Club”, the headline read: “The EU’s response to Donald Trump’s tariffs seems to work.”

What actually happened is that the EU, wisely, chose not to fight. Ursula von der Leyen famously caved in when she signed a humiliating trade deal after making a pilgrimage to the Trump Turnberry resort in Scotland three months later. The occasion was cringeworthy from start to end, including the obligatory thumbs-up group photo with Trump. But the EU delegation had no choice.

Six months later, the European Parliament briefly contemplated an insurrection, but stopped when it peeked over the cliff. In January, after Trump threatened to invade Greenland, and when the US Supreme Court declared Trump’s tariffs to be illegal, Brussels suspended the ratification of the EU-US trade deal. But after Trump threatened the German car industry with even higher tariffs, the MEPs, too, caved. Last week, they voted it through.

Right now, the EU trying to play a similar game with China, and is getting similarly bad advice.

The Europeans are angry about how China plays. Sabine Weyand, the EU’s outgoing director general for trade, compared the Chinese strategy to putting a stinking fish on the negotiating table. She was referring to new Chinese threats, like export controls on rare earths, or a ban of the sale of semiconductors to the EU. The EU is dependent on both. Whenever the EU tries to impose some retaliatory tariffs on China, that stinking fish returns to the table.

The EU has a point here. China’s economic policies are the biggest source of global economic imbalance right now. China’s exports are booming, but China represses domestic consumption. You can see this in EU-China trade data over recent years. Chinese exports to the EU have been going up, and Chinese imports from the EU are actually falling. And this year, it has all got dramatically worse. From January to April, China’s trade surplus with the EU went up by 26% compared to the same period in 2025. What happened is that US tariffs led China to divert some of its exports from the US to Europe.

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China’s currency, the yuan, does not float freely like the dollar, the euro or the pound. China keeps it steady against the dollar. When the dollar weakened against the euro after Trump came to office, so did the yuan. That means Chinese products are even cheaper than they were before. And European goods are even more expensive.

Kaja Kallas, the EU’s often-undiplomatic chief diplomat, likened Europe’s situation with China to that of a patient battling cancer. “If you have a very difficult disease, if you have a cancer, you have two choices. Either increase the morphine or you start chemotherapy.”

Europeans should be careful not to be too sanctimonious. This is essentially a barfight between two mercantilists. The EU has been playing the same game. During the euro crises of the last decade, the EU, too, devalued its currency and started to run large trade surpluses against the rest of the world. The EU’s lament has a certain “I stole it first” quality.

Right now, China is winning this trade war, just as Trump won his own trade war against the EU. The reason is the same in both cases. The EU is too dependent on both of them — on the US for defense, and on China for critical imports. The EU is not in a position to retaliate. This is not due to a lack of policy instruments. Some have never been used, like the “Anti-Coercion Instrument”, which would give the EU discretionary powers to retaliate against China without bureaucratic obstacles.

The reason the EU cannot do this is not just a matter of political division, or weakness, but because of economic dependencies. We caught a glimpse last week, when the EU did the very opposite of what its cheerleaders demanded. Rather than imposing new tariffs on China, it lifted them. As Bloomberg reported, the EU had previously imposed sanctions against Yangzhou Yangjie Electronic Technology, a semiconductor company, but decided to lift them after German car makers warned about supply chain chaos.

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This pattern keeps repeating itself. The Europeans really wanted to stick it to Trump. And to the Chinese too. But they could not do it, because the European car industry employs a reported 13.2 million people in the EU, according to data collected in 2022.

The seeds of this dependence were sown in the 2000s and 2010s. The European car industry, aiming to optimize its supply chains, committed the critical error of making itself reliant on China. As so often, Europe chose short-term gain over long-term resilience.

The first signs of stress became apparent during the pandemic, when the German car industry suffered an acute shortage of semiconductors from China. At the time, everybody was talking about supply chain diversification, but nothing much has happened. After the pandemic, industry returned to business as usual.

China has several other strangleholds in this sector. Car batteries are one example. This is a technology in which China is years ahead of the Europeans. China has an almost total monopoly for rare earth magnets, which are critical ingredients for all electric engines. Your windshield wipers would not work without them, nor would your F-35 fighter plane. Solar panels are another market that China has cornered.

The way many people think about globalization is antiquated. We no longer live in a world of factories that build goods from scratch, and from local products. Rather, modern trading relationships are a complex network. European-made cars are full of Chinese components. The bilateral trade balance that everybody gets so upset about does not tell you what you need to know. They do not capture these network effects and all their inter-dependencies. The important question is not how much China sells us, but how many Chinese imports are used in our exports to the rest of the world, and whether we have alternative suppliers. Measuring network effects is a technically complex task, as electrical engineers know only too well. The global economy is no less complicated than an electric network, and yet we are measuring it with the equivalent of an abacus.

Even Trump had to compromise over his tariffs against China, for the US was dependent on China for rare earths. Thanks to outsourcing, the US has a much smaller share of industry in its the economy than the EU does. Its industry is also less dependent on China for inputs, but its defense industries need rare earth products from the People’s Republic. The dependency goes both ways. China, too, is dependent on Western markets, of which the US and the EU are the largest.

The EU differs from the US only in that its inter-connection with other economies is stronger, and the cohesiveness among EU countries is weaker. You can have as many international trade economists, think-tankers, and journalists supporting Team EU as you wish. If Friedrich Merz and Giorgia Meloni turn up to a key summit and say no to tariffs, the game is over before it even started.  This is not a matter of political will, but one of economic reality; Merz or Meloni have no other choice.

Instead of hyperventilating about China or Trump, then, the EU would be better off solving its underlying problems of supply-chain dependence. Japan managed to reduce its dependence on China for rare earth, after Beijing imposed an export ban following a 2010 dispute over islands in the East China Sea. Instead of pondering yet another discriminatory trade instrument the EU will never use, why not chart out a binding 10-year plan to reduce supply dependencies?

The EU thought about this too, and came up with the Critical Raw Materials Act in 2024. In a report published last month, the European Court of Auditors said the regulation is well intended, but the implementation is lacking. Its devastating verdict was: “The targets established in the Act set the course for member states and for industry, but are non-binding, only cover strategic raw materials and lack justification.”

My advice would be to solve the problem, adopt strategic patience and ignore the hyperventilating fans. The football equivalent of a trade war for which you haven’t prepared is an offside trap gone wrong: all the players push forward, except for one who has second thoughts and suddenly stops.

Some people like to think that in football, the best team wins. We all know this not to be true. The winning team, rather, is the one that keeps their nerve under pressure.

I asked her what it was about the Fidesz system she disliked. “It’s about the corruption,” she said, “and selling our country and our nation to the Russians, and stealing our money, and EU taxpayers’ money, and this sort of feudalism that he built.” Beatrix, her niece, nodded along emotionally. “I want to get married and have children,” she said. “We all have good jobs but we don’t earn EU wages. My boyfriend lives in London, and if we lose now I’ll move there and leave Hungary forever. I see this as an election for the EU and against Russia — I’m a European and I don’t want to belong to the East.”

But as polls closed, and the crowds gathered in front of the giant screens showing the televised results coming in, the outcome still seemed to hang in the balance. Government-aligned commentators had made much of what they claimed were strong showings across the country; earlier in the day, turnout had looked strongest in rural areas long seen as Fidesz strongholds, with liberal Budapest only rousing itself to vote in significant numbers in the afternoon. It had been assumed that the initial results would show a strong showing for Fidesz and Orbán, with the true dynamics only revealing themselves late into the night — or even, in case of a close-fought battle, later in the week, once the results from the sizable Hungarian diaspora had been counted. But whatever inner trepidation the crowd felt was not to last long. As each new tranche of results came in, the crowd roared in joy at the victory suddenly unfolding before them, chanting “Dirty Fidesz” and “The Tisza is Flowing”, the motto of their party, named after Hungary’s second-largest river. Fidesz’s vote share in the provinces had collapsed, a source at the government’s rival election night party told me, and the mood there was grim. A Trumpian election night party, Patriots of Europe, was abruptly canceled.

Perhaps this wasn’t the shock it seemed. The evening before, I had attended Péter Magyar’s final campaign event in Debrecen, Hungary’s second city, close to the eastern borders with Romania and Ukraine. Long a Fidesz stronghold, Debrecen was now contested territory. Orbán had pulled large crowds into the city center a few days earlier, but the crowd for Magyar, gathered in the University Square, was larger still. The sight of tens of thousands of Tisza voters, young and old, bearing flaming torches in the lowering night sky and chanting for Magyar’s victory was impressive enough from the middle of the crowd. Seen on television, the sea of fire filmed from above by a drone, it was overwhelming. The speech from Magyar, a fluent and charismatic speaker, was good enough, but the sheer size of the crowd was the real message being sent to the wavering voters watching at home. Provincial Hungary was now in play, Gabor, a 22-year-old trainee teacher from a nearby village told me. “The majority are still Fidesz voters, unfortunately,” he said, “but we are trying to convince our parents and grandparents, and things are definitely changing.” Daniel, a 19-year-old student, agreed. “Hungary’s history has always been pretty bad, to be honest. And now we feel that things are finally beginning to change.”

Back in Batthyány Square, the whole crowd pulsed with a mass intake of breath and then let out a vast roar of victory as the ticker ran across the screen announcing that Orbán had congratulated Magyar on his win, long before anyone expected — such was the scale of Tisza’s victory. Magyar had won a countrywide landslide, and the generation-long political experiment of Orbánism was over, at least for now. Breathless and alarmist commentary, from Hungarian opposition activist-journalists and their aligned thinktankers and commentators in the West, had warned that Orbán would, in the face of defeat, try to hold onto power through some malign dodge or other, whether dragging the election through the courts or staging some kind of provocation to annul the results. But in truth, this was never Orbán’s style: illiberal he may have been, but he was never a dictator, however his opponents framed him. In the end, the genuine popularity that kept him in power for a generation meant too much to him, and when he lost, in a free and fair election, he relinquished power gracefully. 

Even so, it was a historic moment for those gathered in the square, debating what should be done with the man who had shaped Hungary in his image for so long: I hope he goes to Russia, one said; no, I hope he goes to prison, her friend said; no, said an older woman, shaking her head slowly as if asserting the wisdom of age, I hope he stays in Parliament, and is made to answer for everything he did. “We feel the breath of ‘89,” Hanna, an 18-year-old goth, told me. “All our lives, we lived through the Fidesz system, it’s kind of a new breath to see this change. Fidesz never cared about us, until we make children.” Her companion, Milos, agreed. “Thank God, Thank God,” he said, casting his eyes upward. “I really hope we get closer to the European Union, and we can distance ourselves from Russia.” 

This election, cast externally as a battle between liberal Europeanism and something approaching Asiatic despotism, was perhaps swung by hard-nosed domestic rather than broader philosophical concerns, centering on the struggling economy, on corruption that was “simply indefensible”, as one Fidesz insider had previously put it to me, and on the parlous state of public healthcare and social infrastructure. Yet it must be said that the liberal, middle-class inhabitants of urbane Budapest, gathered in the square, some of them waving EU flags as well as the far more numerous Hungarian ones, certainly fit the image of Tisza positively projected by its supporters outside Hungary, and negatively by Fidesz loyalists domestically and abroad. Budapest, which still looks and feels like the polyglot imperial capital it once was, is a liberal city in a conservative country: but the final electoral map made the country as a whole look far more like Budapest than anyone had expected.

Yet Tisza’s leader, a Right-wing nationalist with a far more restrictive stance on legal immigration than Orbán, is hardly the radical liberal Fidesz and its army of MAGA influencers made him out to be. The crowd’s most animated and vehement chant was “Russians Go Home”, a relic of the 1956 revolution latterly applied to Fidesz, but Magyar has already signaled he won’t be unplugging the country from Russia’s cheap and plentiful energy bounty any time soon. Hungary has moved from one version of personalist conservative rule to another, this time round led by a former Fidesz insider with a European focus, ready to unlock Brussels’ long-withheld and sorely missed financial bounty. Magyar’s victory seems less a defeat for the European Right than a generational evolution of it, which — at least in Hungary’s unique circumstances — has brought liberals and Leftists, both political nullities in this country, under its conquering wing. Perhaps that’s why Phil, a 26-year-old voter for the far-Right Mi Hazank party, was calmly philosophical about the new regime, as he watched the crowds of ecstatic zoomers beeping horns and waving flags as if Hungary had just won the World Cup, pulsing Eurodance blaring from car windows. “Orbán was just too close to America, and Hungary is a European country,” he shrugged. “At least Tisza is Right Wing.”

Nobody in the world is completely independent, but many countries are more robust than we are. Russia has proven resilient, shaking off Western sanctions, which should come as no surprise to anyone who knows the country. China, too, is clearly resilient. And the US is more than resilient. It is a country that thrives under adversity, very much in accordance with Nassim Nicholas Taleb’s notion of “Antifragility”.  Modern Europe, however, is most certainly not antifragile. With every shock, it weakens. After the Covid pandemic, the US reconnected with its pre-pandemic growth trajectory. The Europeans, mostly, did not. Our GDP settled at a level below its previous trajectory — growing at an increasingly lower rate.

It is now happening again. Only three weeks into the US-Iran war, European interest rates have risen and there are reports of gas shortages. Why are the European gas tanks almost empty? Why have the Europeans not built a large strategic oil reserve, like the US and China, or gas reserves lasting for several years?

The very essence of dependency is when you let others do your strategic thinking. In Niall Ferguson’s biography of Kissinger, the ex-secretary of state is quoted as saying back in 1966 that “the present system encourages too many of our allies to shift the costs and the responsibilities of the common defense to us”. This has been a theme in transatlantic relations ever since, as Europe’s culture of dependency expanded into other areas, including technology. It’s like a drug addiction that started out casual and harmless but eventually became destructive.

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The problem with political addictions, especially those that have been allowed to fester for decades, is that they become hard to reverse.  For example, Germany made itself dependent on Russia for its gas supplies for the two decades until Russia invaded Ukraine in 2022. It took a war to end it. At that point, the Germans switched towards gas from the US and Qatar and replaced one dependency with another. They are dependent on gas because they persisted in killing the only two energy sources they had: coal and nuclear. Yes, there is clearly a good environmental reason to phase out coal, but this wasn’t the right time. To end both coal and nuclear together, and to do so simultaneously, is hopping mad. Nobody understood nuclear engineering better than the Germans; they gave up on an important energy source, as well as a technology.

If you prioritize strategic independence, the right policy mix for European countries would be the kitchen-sink approach and do everything: nuclear, renewables, gas, and coal. If one goes, you still have the others. The idea that Europe, which is one of the least resource-rich places on earth, has a choice in this matter is delusional. The Europeans Greens were right about renewables, but they messed up by turning it into an ideological debate. So did the parties on the Right, who were anti-renewables. I think this is just as stupid.

Europe hasn’t just sacrificed its energy independence, but its military independence too. Our European armies are in a dreadful state. The decay cannot be adequately measured in terms of military spending as a proportion of GDP. The metric vastly understates the true extent of the dilapidated state of our armed forces. General Sir Richard Barrons, a former commander of Britain’s Joint Forces Command, said that the British Army, were it to act alone, “could seize one small market town on a good day”. I have heard similar comments from German Bundeswehr generals. They all agree they couldn’t fight Russia. When Europe spends on average 2% of its GDP on defense, and the US spends 3.5%, this does not even begin to tell you what’s really going on. If you measure it in terms of what security the money has bought, the gap is much bigger than the one between those two headline numbers.

Because of this, we cannot supply more weapons to Ukraine. We don’t have any left that we can discard without endangering our own security even further. Europe’s armed forces also fail to attract the right people. I know of someone who was rejected by the German army over a decade ago on the grounds that he was overqualified. Back then, the German army was a welfare program for unemployed young men. This was when Ursula von der Leyen was Germany’s defense minister. Today she is President of the European Commission,

The reason why we Europeans hyperventilate so much about Donald Trump is that he threatens our dependence on America like no one else has ever done. He threatened to pull out of Nato unless we spend more money on defense. And now one of the many unintended consequences of his war against Iran, which is a big political and military miscalculation, is that it exposes the weaknesses of our energy policies. It really is his war, and our problem.

If we have to pay for our own defense, our own energy security, and for Ukraine, out of our own pocket, then the math is quite simple: we can no longer afford cradle-to-grave welfare systems. We Europeans arrogantly look down on Americans because the US has food stamps where we have guaranteed citizens’ incomes. We Europeans lived in a delirious state, one in which we mistook our own pathetic dependence for cultural superiority. Once you are at such an advanced stage of delusion, it is going to be very difficult to reconnect back to reality. I don’t see any political party, in any European country, on the Left, the Right, or in the center, that has a concrete strategy for an independent Europe. All that is on offer is different forms of dependency.

This leads naturally to the question of what to expect going forward. Until about a decade ago, I was moderately optimistic that the EU, or rather the eurozone, could emerge as a vehicle for geopolitical power and independence. If the euro had been fortified by a capital markets union, and a sovereign debt instrument, the EU would have acquired an instrument of geopolitical force, very much in the way the US is exploiting the dollar, and its dominance of the global financial market, as a tool for geopolitical sanctions.

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The eurozone crisis was the moment when it became clear that the EU would not go down in this direction. It was a decision of historical importance. The opportunity came, and it went. The EU chose the soft option, a central bank bailout that transformed an acute crisis into the low-burner, long-term decay the EU finds itself in today.

The most probable way for change to occur is through an existential crisis, brought about by one of the four horsemen of the apocalypse: war, pestilence, famine or death. We had a pandemic. Then a war. Then another war. Fertilizer shortages might  lead to a famine. The global financial crisis was an important historical event, but it was not the big one. There is no preordained timeline to any of this. The state of delirium can easily outlast all of us. But however long it persists, it is unsustainable. This won’t go on — not because it shouldn’t, but because it can’t. A dependency is only ever sustainable if the side you depend on plays along. Trump has broken that link. I think it’s unlikely that even a Democratic successor would reestablish it. You can no longer be a drug addict when the supply runs out.

The real irony here is that we Europeans used to be the ones that others were dependent on. But no more.  Connally’s famous quip about the dollar being the US currency and Europe’s problem had a European precursor: the Austrian diplomat Klemens von Metternich. He once said of France, the dominant continental power in the 18th and 19th centuries, that “when France sneezes, the rest of Europe catches a cold”. Today, it’s America that’s sneezing — and Europe can’t shake its cold.

Nor do things end there. American LNG is not only significantly more expensive than Russian pipeline gas, it is also far more volatile. Pipeline gas was typically delivered under long-term contracts with predictable pricing. LNG, by contrast, is tied to global spot markets, making prices highly sensitive to fluctuations in supply and demand, weather events and geopolitical shocks. Indeed, the timing of Europe’s announcement could not have been more unfortunate: as officials in Brussels congratulated themselves on their newfound “energy autonomy”, US gas prices surged around 70% in a week, reaching their highest level in three years after severe cold weather froze pipelines, disrupted supply, and drove up domestic demand in the US.

Those price spikes will feed directly into higher gas and electricity costs in Europe — during one of the coldest winters in years, and at a time when millions of Europeans are already unable to afford adequate heating. Higher energy prices have already crippled industrial competitiveness and pushed major economies, above all Germany, towards deindustrialization.

Taken together, the episode encapsulates the self-destructive character of EU energy policy over the past four years. Yet the problem is not merely that cheap and reliable Russian gas has been replaced with costlier and more volatile American LNG. More troubling still is that the United States is far more likely to use its energy exports as an instrument of political pressure than Russia ever was, leaving the EU more dependent on its imperial master than ever.

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For all the talk of Russia’s “weaponization” of gas supplies, history tells a different story. For decades, first the Soviet Union and later Russia continued supplying energy to Germany and the rest of Europe through multiple geopolitical crises, including during the height of the Cold War. More recently, even after the delivery of German weapons to Ukraine, and then the attack on Nord Stream, Moscow repeatedly stated that it was up to Berlin whether to resume gas supplies or not.

The United States, by contrast, has a long and well-documented history of weaponizing energy — using it as leverage to extract economic and geopolitical concessions. And under Donald Trump, this has become explicit policy. The US National Security Strategy, published in November 2025, designates “American energy dominance” across oil, gas, coal and nuclear power as a top strategic priority, explicitly framing the expansion of American energy exports as a means to “project power”. This is not mere rhetoric. The Trump administration has repeatedly demonstrated its willingness to intervene aggressively in domestic and global markets, upend established policies and exert pressure not only on adversaries but also on long-standing allies.

By the time Trump returned to office, Europe’s dependence on US energy was already a fait accompli, following the EU’s decision to cut itself off from Russian gas and the sabotage of Nord Stream. Since then, Trump has only actively sought to deepen that dependence. In April 2025, for instance, his administration used the so-called “Liberation Day” tariffs to pressure Germany and other EU states to refrain from importing any Russian energy.

A few months later, Trump strong-armed the European Commission into a commitment to buy $750 billion worth of US LNG, oil and nuclear energy products, in exchange for avoiding punitive tariffs. The figure in itself is unrealistic, but that was never the point. As Trump’s energy secretary Chris Wright put it, the objective was to signal that Europe’s energy dependence would be “long-term”. The pressure worked. According to Bruegel, a Brussels-based think tank, LNG shipments from the United States to the EU rose by around 60% in 2025 compared to the previous year.

At the same time, Washington has increasingly politicized these energy flows, with US officials openly linking continued LNG supplies to regulatory and political concessions. Just months ago, Wright and his Qatari counterpart jointly urged EU leaders to repeal climate and environmental regulations deemed obstacles to fossil fuel imports, explicitly tying these demands to Europe’s reliance on LNG from America and the Gulf.

But it took Trump’s explicit threat to take over Greenland to finally snap Europeans out of their complacency. As The New York Times reported, European leaders and analysts now fear that Trump could weaponize US energy exports to extract concessions not only over Greenland but across a wide range of issues. As Sophie Corbeau of Columbia University’s Center on Global Energy Policy put it, “people have started to realize we are probably a little bit too dependent on US LNG.”

That’s a polite way of describing the fact that Europe now finds itself heavily dependent for its gas on a country whose President openly threatens the territorial integrity of a European state. Whatever risks were associated with dependence on Russian gas, they pale in comparison. It is telling that the EU’s energy commissioner, Dan Jørgensen, is now speaking of the need to diversify away from American LNG.

However, this is little more than performative indignation. The prevailing European narrative suggests that none of this would have been conceivable before Trump. But this is ludicrous. Trump’s crude tactics pale in comparison to the bombing of the Nord Stream pipelines, the single largest act of industrial sabotage in Europe’s history — an operation that was either directly carried out or politically sanctioned by the Biden administration to forcibly sever Europe from Russian gas and lock in dependence on US LNG. Recall, if nothing else, Washington’s own threats on this very issue. Germany’s — and Europe’s — silence in the aftermath of the attack makes today’s expressions of shock look like mere political theater.

The truth, then, is that the dangers of replacing Russian gas with American LNG were obvious from the start. The economic and political costs were foreseeable and indeed widely predicted. The only difference between then and now is that Trump has made Europe’s squalid reality impossible to ignore.

It is crucial to understand, however, that Trump’s weaponization of European energy supplies is about far more than bluster or the ruthless pursuit of short-term gains. As the US National Security Strategy makes clear, these moves are part of a broader, long-term strategy aimed at securing American energy dominance for decades to come. No less important, US bullying should be seen as part of a last-ditch effort to preserve the country’s hegemony in a rapidly changing global order.

Control over energy has long been a central pillar of US postwar foreign policy. For much of that time, this effectively meant control over the global oil trade. From the overthrow of Iran’s nationalist government in 1953, to the invasion of Iraq in 2003, virtually every major US intervention in the Middle East followed this logic. This was never solely about securing oil supplies for domestic consumption. More fundamentally, it was about entrenching American global power.

By ensuring that oil was traded in dollars — and that exporting countries recycled those dollars back into the US financial system — Washington was able to elevate the dollar to the status of the world’s reserve currency, granting itself what Giscard d’Estaing called the “exorbitant privilege” of self-financing its imports. At the same time, by controlling the physical and financial choke points of the oil trade, the lifeblood of the global economy, the US acquired a powerful coercive tool: the ability to punish states whose policies ran counter to American interests, either by cutting off their access to energy supplies or by excluding them from the dollar-centric financial system via sanctions.

In recent years, though, the foundations of this system have come under increasing strain. Countries operating outside US control — notably Venezuela, Iran and Russia — have supplied growing volumes of oil to global markets, especially China, helping fuel its rapid rise. In parallel, these and other oil exporting countries, including traditional allies of the US such as Saudi Arabia, have begun pricing oil in non-dollar currencies or openly threatened to do so, challenging the monetary underpinnings of American power.

Until Trump’s recent attack, for instance, Venezuela was supplying around 5% of China’s oil needs. Iran, despite years of sanctions, has maintained remarkably high oil export levels. More than 80% of the Islamic Republic’s crude now goes to China, accounting for 13% to 15% of the PRC’s total crude oil imports. The freedom of countries to export oil and other resources on terms not dictated by the US — and this also applies to Russia’s gas exports to Europe before 2022 — poses a dual threat to its hegemony. It not only undermines dollar dominance, but also weakens Washington’s ability to use energy and sanctions as tools of geopolitical discipline.

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Trump has been candid about these stakes. In 2024, he warned that losing the dollar’s status as the world’s reserve currency would be “like losing a war”. Others have been similarly explicit. Marco Rubio, commenting in 2023 on a trade agreement between Brazil and China, cautioned that such deals were creating a parallel global economy “totally independent from the United States” — one in which Washington would no longer have the ability to enforce economic sanctions. This is why any country pursuing an independent energy policy is automatically framed as a security threat.

Seen in this light, many US actions in recent years — from severing Europe’s access to Russian gas, to the seizure of Venezuelan oil assets, to escalating pressure on Iran — can be understood as elements of a single, coherent strategy: reasserting American physical and financial control over global energy flows, gaining leverage over adversaries and allies alike, and deterring countries from breaking with the unwritten rules of the US order.

Trump summed up this strategy when he said, after the attack on Venezuela, that “China can buy all the oil it wants from us” — but in dollars, and on American terms. It remains to be seen whether this gamble will be successful. But one thing is clear: the greatest threat to peace today doesn’t lie in the emergence of a multipolar world, but in the United States’ determination to prevent it, even at the cost of driving its own allies into the ground.

But there are 21 other member states who have not been sanctioned. One is Italy. Giorgia Meloni has already said she told Trump that his tariff threat was a mistake. I think it was too. But is Meloni going to break with the President over a patch of land that is far away and irrelevant to Italy’s security and economy? Will Spain? Or Greece? Or Malta and Cyprus? What about eastern Europe? Will Viktor Orbán, Andrej Babiš, and Robert Fico — the populist prime ministers of Hungary, the Czech Republic, and Slovakia respectively — run to the rescue of their liberal friends in Denmark? Even Poland, with a government that is as pro-EU as it can get, is hardly going to sacrifice its strategic alliance with America over a few rocks of ice near the Arctic.

The truth is that the Europeans never really cared about Greenland. It was the first country to leave the EU – in 1985 – long before Brexit. It’s a fishing nation; fish is over 90% of its exports. And it left because EU fisheries policies would have deprived it of the right to manage its own stocks. Greenland could have been the EU’s, had it really wanted to keep it.

So here is my bold prediction: Trump will win his battle for Greenland. The Europeans will not stop him, for they are weak and divided. The irony is that the EU chose this military and geostrategic weakness. It chose to deprive our militaries of necessary resources in favor of welfare transfers and support for NGOs. A decade ago, the eurozone had an opportunity to create a political, economic and financial union in response to the sovereign debt crisis. But it chose not to because it was inconvenient. Meanwhile, the UK chose to leave.

When the European member states of Nato decided to bow to Trump’s pressure and increase defense spending last year, they did not create a European defense union. They can’t agree on anything: a joint Franco-German-Spanish fighter aircraft project is on the rocks because the three countries cannot agree the workshare. Instead, each has only reinforced its dependence on the US. Everybody thinks they are better off with their own special relationship. But as Benjamin Franklin once said: “He that lies down with dogs, shall rise up with fleas.”

And the Europeans have just woken up, and this time they are really cross, clamoring to issue press statements to condemn Trump. I am hearing commentators urging the EU to deploy the Anti Coercion Instrument, a legal device that came into force two years ago to counter economic pressure from adversaries. They insist that the EU is stronger than it thinks. It is the world’s largest single market and customs union, is it not? And it deems itself a regulatory super-power.

It is deluded. The EU’s single market is full of regulatory barriers. Its hostile green and tech regulation did not change the world for the better; it succeeded only in damaging Europe’s competitiveness. As a result, unlike China and America, Europe will not share in the AI boom. The EU, in its current form, is further from becoming a superpower than it was 30 years ago.

A union in which member states retain full sovereignty is only as strong as its weakest member. And that’s Germany right now. Given the state of Germany’s economy, and its dependence on the US, it would be utter madness for the EU to retaliate against Trump’s tariffs.

What also mitigates against joint action is the bloc’s lingering delusion that someone or something out there is going to stop Trump. Last year, European leaders believed that the financial markets would push back against his tariffs, only to be shocked that after an initial wobble, Wall Street lined up behind its President. When the Trump administration went after Jerome Powell, the chairman of the Federal Reserve, last week, the markets missed another opportunity to crash. Now the Europeans are convinced that the Supreme Court will block the tariffs.

On this narrow issue, they may actually be right. But they are missing the bigger picture. We know there is going to a Supreme Court ruling tomorrow that may be the long-awaited ruling on the tariffs. We know that some of the justices reacted with skepticism to the legal arguments in a hearing with Trump’s lawyers. There is indeed a chance that the Trump administration will lose the case. I can already see The Guardian’s celebratory headlines.

But even if the ruling goes against Trump, he will still win. This case is not about whether a US president is allowed to impose tariffs for reasons of national security. It is about whether the Carter-era International Emergency Economic Powers Act is the correct legal base for his tariffs. Trump chose IEEPA because it gave him the largest degree of discretion. But there are alternative laws that would allow him to get the same done.

Trump could, for example, reinstitute a crippling tariff bureaucracy as he did with steel and aluminum. I recall a story from a German exporter of agricultural machinery who was forced to list the steel and aluminum content of the 15,000 parts of the product. He gave up. It was an impossible undertaking.

In protest at this latest tariff threat, the European Parliament decided to freeze the ratification of the EU-US trade deal, under which it promised to cut tariffs on US goods to zero. As a result, the deal may collapse. Similarly, the UK-US deal is also now at risk. I don’t think Trump is quaking in his boots.

The President has many ways to force the Europeans into line. He could impose his own peace treaty on Ukraine, side-lining the EU. He could also go further and switch off US intelligence sharing not only for Ukraine, but for European Nato members as well. He could also announce that he would not authorize US troops to protect any Nato countries that push against American interests — effectively giving Vladimir Putin free license to wage war in Europe.

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It is hardly surprising, then, that the only people outside the US who celebrated his tariff announcement were the Russians. Kirill Dmitriev, CEO of Russia’s Direct Investment Fund and a Putin adviser, posted on X that finally the US and Europeans have something important to talk about in Davos this week.

So, what are Europe’s options? The EU was never going to be a military alliance, but at least it had chance to become an economic one. To be ready for a geopolitical fight today, though, the EU would have needed to evolve into a political union a decade ago. The eurozone crisis between 2008 and 2015 was the final, missed, moment where the bloc could have taken that step. Since then, Right-wing parties have been on the rise in France and Germany; so has euro-skepticism. The window for political unification has closed.

So should Europe send more troops to Greenland? Fight the guy, some hot-headed commentators suggest, transitioning from complacency to panic without a moment’s pause. Fight Putin and Trump at the same time? I think not. Such a move would be Europe’s “Charge of the Light Brigade” moment.

No. The only option the EU has now is to let Trump be Trump. These tariffs reveal the US strategy. He does not seek a military solution. He is not a natural warrior. Nor are we. So, with no alternative on offer, let’s drive up the price. And when all is said and done, why not hand him the Nobel Peace Prize too?

Conspicuously absent, however, was any response from the EU’s institutional leadership. The same Brussels officials who routinely issue dire warnings about the alleged Russian threat to Europe declined to comment on an explicit US threat against European territory. And only hours earlier, most European leaders had offered either tepid or implicitly supportive responses to Trump’s unambiguous aggression against Venezuela. If there was a logic, it was to avoid confrontation with Washington at all costs. And yet ironically those same leaders quickly found themselves facing the prospect of similar US action directed against a European country.

A direct US military seizure of Greenland remains unlikely, though not unthinkable. A more probable scenario is an “association agreement” modeled on Washington’s arrangements with Micronesia, the Marshall Islands and Palau. Under these agreements, the US exercises sweeping authority over defense and security in exchange for financial assistance. The states involved remain formally sovereign, but in practice are tightly bound to US strategic priorities. An analogous arrangement with Greenland would offer Washington the advantage of consolidating control while formally respecting Greenlandic self-rule, all while weakening Denmark’s position. A 1951 agreement already allows the US to station unlimited numbers of troops on the island; today, only one active base remains, but the legal framework for expansion is firmly in place.

The ambiguity is intentional. Earlier this week, White House press secretary Karoline Leavitt stated that the use of the US military was “always an option” as Trump and his advisers reviewed different annexation scenarios. Whatever path the administration chooses, it is determined to resolve the matter swiftly. And European leaders, judging by their response so far, are likely to acquiesce. How can one account for the seemingly irrational, and indeed outright suicidal, posture of Europe’s political leadership? By acknowledging a simple fact: European elites are deeply embedded in the transatlantic system from which they derive their power and legitimacy. They perceive that system as under threat and are prepared to defend it at almost any cost, even if that cost includes European sovereignty or territory.

After all, Europe has already sacrificed its core economic and security interests to US imperial diktats. It has joined a proxy war against Russia that has devastated Ukraine and hollowed out European industrial competitiveness. It has imposed sanctions that inflicted far greater damage on European economies than on Russia. It has remained conspicuously silent following the destruction of Nord Stream, a critical piece of European energy infrastructure — an act probably carried out with at least indirect US involvement and likely foreknowledge by some European governments themselves. If European leaders were willing to accept all of this, acquiescing to US control over Greenland — whether through military pressure or pseudo-legal arrangements — would not represent a radical departure.

So much for Europe’s much-vaunted “strategic autonomy”. The reality is that beneath the rhetoric of independence, European governments have systematically appeased Trump — from increased Nato military spending, much of which will flow directly into US defense contractors, to punitive trade conditions to accepting financial responsibility for sustaining the war in Ukraine.

From the perspective of Europe’s governing classes, Nato and the proxy war in Ukraine are less about security or prosperity than about preserving an imperial architecture in which they can play a subordinate but privileged role. This is why Nato would likely survive even a US move against Greenland, albeit stripped of any remaining illusions of sovereign equality among its members.

This dynamic also helps explain a seeming paradox. Globalist European leaders openly despised by Trump — figures such as Emmanuel Macron or Friedrich Merz — have been more supportive of US aggression against Venezuela than Right-populist forces openly favored by Trump, such as Marine Le Pen or Viktor Orbán, who have adopted more cautious or critical positions. EU institutions, in particular, have been notably supportive of Washington’s actions — the bloc is not a counterweight to US power, rather one of its central pillars.

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It is therefore plausible that elements of the EU establishment are coordinating closely with factions of the US national security apparatus — or even with the Trump administration itself. After all, while it is true that Trump has abandoned any pretense of transatlantic unity and increasingly treats Europe in openly transactional, even neo-colonial terms, Europe’s political class has demonstrated its willingness to comply. Once one understands that Europe’s current leaders long ago ceased to think in terms of national or even “European” interests, and have instead become beholden to a single objective — the preservation of a dying system of Western hegemony, or the so-called “rules-based order”, and the benefits they derive from it in their sub-imperial role — their seemingly irrational behavior begins to make sense.

What should alarm Europeans is not the prospect of US “abandonment” or Nato’s collapse — developments that could, in principle, create space for genuine autonomy. In fact, it’s the opposite: the likelihood that Europe remains locked into a subordinate role precisely as Washington adopts an increasingly aggressive and lawless posture.

This is the broader context in which Trump’s attack on Venezuela and threats against Greenland must be understood. The events are revealing about the evolving nature of US foreign policy. While some analysts interpreted the latest National Security Strategy (NSS), along with Trump’s attempts to negotiate a settlement in Ukraine and his calls to scale down commitments in Europe, as evidence of a sober acceptance of multipolarity, Venezuela suggests a very different conclusion. Far from abandoning hegemony, the US is attempting to preserve it through new means, by globalizing a proxy-war strategy that targets weaker links in the rival system. While avoiding direct military containment of China or Russia, confrontation is displaced onto peripheral theaters and sustained through permanent destabilization. In this model, even the most elementary rules of international coexistence are discarded.

This shift is a reaction to a deep crisis of US hegemony. Its economic dimensions are well known: ballooning public debt, unsustainable private leverage, a financial system increasingly detached from productive activity, extensive deindustrialization and the gradual erosion, however partial, of the dollar-centric system. In short, this is a specific crisis of both US capitalism and the broader post-1945 imperial order.

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The US response to this is not to accept Washington’s role within a new global arrangement — one in which America could continue to prosper as a powerful but “normal” state — but to aggressively reassert its dominance. This reassertion increasingly takes the form of naked imperialism or neo-colonialism: not merely economic coercion, but the direct seizure of resources, the control of shipping lanes and supply chains, and even the open claim to foreign territory. Trump’s declaration that Venezuela will be “run” by the United States, coupled with the threat of further “kinetic” action should a future government resist, is thus emblematic.

This orientation is stated openly in the National Security Strategy. The document declares that the US will deny non-hemispheric competitors control over strategically vital assets, condition aid and trade on political alignment, discourage governments from cooperating with rival powers such as China or Russia, and use financial, technological and security — including military — means to ensure compliance. In practice, this strategy is already being implemented, well beyond the Western Hemisphere. Over the past year, the US has conducted bombing operations in seven countries — as varied as Iran, Nigeria and Somalia — none authorized by the UN Security Council and none credibly justified as acts of self-defense under the UN Charter. In parallel, Trump has issued direct threats against a growing list of other states.

In purely empirical terms, there is nothing new about the US resorting to violence to defend its economic and strategic interests; this has been a constant feature of US policy, even and especially under the so-called rules-based order. Across Latin America in particular, Washington has repeatedly intervened, covertly and overtly, whenever governments pursued land reform, resource nationalism or independent development paths that challenged US interests. What is new is the abandonment of even the pretense of legality or humanitarian concern. This is what domination looks like without hegemony: power exercised openly and coercively.

And it is precisely this nakedness that makes the current moment so dangerous. By signaling that no rules remain, not even rhetorically — Washington is effectively legitimizing a world of unrestrained power politics — one that is arguably already a reality, but which the West, until recently, at least claimed to oppose. This is particularly destabilizing given that US actions against Venezuela and Greenland should not be understood solely in economic terms; they are also strategic moves directed against China, and to a lesser extent Russia. Contrary to the idea that Washington is willing to divide the world into stable spheres of influence, the goal appears instead to create platforms from which US power can be projected more aggressively, ultimately to confront China before the balance of technological and economic power shifts irreversibly.

This is a gamble rooted in the assumption that sustained military and economic attrition can at least delay a tectonic shift in the global order. It is a position inherited from an older colonial worldview which saw non-Western development itself as an existential threat. In this sense, as one commentator insightfully put it, time itself is being weaponized. American elites are engaged in what might be called governance by delay: prolonging conflict and maintaining instability in the hope that some external shock — let’s say a technological breakthrough, an internal crisis among rivals — will restore lost leverage.

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The irony is that this strategy is profoundly self-defeating. The more openly coercive US behavior becomes, the faster it erodes the very structures that once underpinned American hegemony. After 1945, US dominance was not built through territorial annexation, or pure military power, but through administrative architecture: a dense web of alliances; the dollar-backed financial system; global trade regimes; standards bodies; technological ecosystems. This networked hegemony made integration with US-led systems the path of least resistance for most states — though, of course, the threat of violent reprisal was always there and often used.

Instead, when a hegemon instead behaves like a caricature of imperial power, it encourages states to seek alternatives — which now, unlike even just a decade ago, actually exist. To rephrase, Trump is incentivizing other nations to further diversify reserves, reduce dollar exposure, explore new payment systems and forge new security partnerships. Indeed, many countries, from South Africa to Brazil to India, are already pushing back against Trump’s bullish tactics. Thus, the primary beneficiaries of Trumpian aggression are precisely those Washington seeks to contain. China, and Russia too, have spent years advocating for an alternative framework for global cooperation based on sovereign equality and multipolarity. Each act of US lawlessness strengthens their appeal. After the illegal assault on Venezuela, expect the queue of countries seeking closer association with BRICS (and similar groupings) to grow longer, even as the US responds by escalating threats against those who do.

Europe, meanwhile, risks guaranteeing its own decline. By clinging to a subordinate role in America’s fraying imperial system, European elites are sacrificing the continent’s long-term autonomy for the prospect of their continued access to power. Yet this also means aligning themselves with a hegemon that governs through naked violence and coercion, at precisely the moment when adaptability and restraint are most needed. In doing so, they expose their own societies to escalating risks — economic, political and military — without any increase in security or influence. While the future of the global order remains uncertain, Europe’s own fate seems sealed.

His offense? Opposing Brussels’s plan to seize Russia’s frozen assets held in Europe. The overwhelming majority of them are parked at Euroclear, a Brussels-based clearing house that sits at the heart of global securities settlement. For Europe’s pro-war lobby, led by France and Germany, confiscation was presented as the only way to continue financing Ukraine’s war effort — or, failing that, to force member states to assume the burden collectively through other, increasingly extraordinary means.

Belgium, however, had compelling reasons to resist. Confiscating — or functionally expropriating — Russian central bank assets would violate one of the most sacrosanct principles of international finance: the neutrality and inviolability of sovereign reserves. Breaching that principle would not only set a dangerous precedent, but would also expose Belgium to potentially severe legal, financial and geopolitical consequences — as Euroclear is domiciled there.

As Robert Volterra, one of London’s most respected international lawyers, warned, confiscating Russian assets would be “absolutely illegal” and would haunt the EU for generations. The legal fallout could be enormous. Russia had multiple avenues for challenge and had begun to explore them, already filing a lawsuit in Moscow against Euroclear.

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From there, Russia could pursue litigation in Belgian courts, potentially all the way to the supreme court. Belgian judges would be forced to determine whether Russian property rights under domestic law had been violated and whether the principle of sovereign immunity had been breached. On both counts, Russia’s case would be strong. Were Russia to prevail, Euroclear itself would be liable. Given the sums involved, the clearing house would almost certainly be rendered insolvent, triggering national and EU-level deposit guarantee mechanisms.

In such a scenario, Euroclear would in turn be compelled to sue the Belgian state, which would have ordered the effective expropriation of client assets. The prospects of such a claim would be far from negligible. Beyond Belgium, Russia could also bring cases before the European Court of Justice, the International Court of Justice and multiple international arbitration forums. Even setting litigation aside — one might argue that in the current context it would be hard to find a Western judge willing to rule in Russia’s favor — it is difficult to see how Belgium could justify refusing to unfreeze Russia’s reserves if and when a peace settlement is eventually reached.

It is therefore hardly surprising that Belgium emerged as one of the most vocal opponents of the plan. De Wever has bluntly warned that confiscation would amount to “an act of war”, likening it to entering a foreign embassy, stripping it of its contents and selling them off. One might reasonably conclude that he is simply defending his country’s interests by upholding international law. And yet, for this, he has found himself subjected to a smear campaign by the EU’s political and media establishment. He has been accused of acting under Russian intimidation — or worse, of being a Russian asset himself. At the same time, Brussels threatened to “treat Belgium like Hungary” if it continued to oppose the plan. That’s what happens when even loyal pro-EU governments dare to step out of line.

Despite the massive pressure, De Wever stood his ground. And he was joined by a growing front of dissenters. Hungary and Slovakia openly rejected the scheme, with Hungarian prime minister Viktor Orbán accusing the Commission of “systematically raping European law”. Italy, Bulgaria and Malta also expressed reservations.

The economic and financial implications of confiscation, after all, would extend far beyond Belgium. Once the assumption that sovereign reserves held abroad are immune from political seizure is broken, there is no telling what the consequences may be. Countries would begin to view euro-denominated assets not as a safe store of value, but as a political liability — one that can be confiscated at Brussels’s discretion. The message would be unmistakable: your assets are safe only as long as you remain politically compliant. The result would almost certainly be that capital would start to flee Europe — even faster than it already is.

Nonetheless, faced with growing resistance, Brussels last week resorted to invoking emergency powers under Article 122 of the Treaty on the Functioning of the European Union to indefinitely freeze the Russian assets, claiming this would allow it to act by qualified majority rather than unanimity. Yet this represents a blatant distortion of the Treaty. Article 122 applies strictly to emergency economic measures in response to natural disasters or severe economic disturbances. It does not apply to foreign policy, which unequivocally requires unanimity. The fate of Russia’s frozen sovereign assets, however, is self-evidently a foreign policy matter. Claiming otherwise is an extra-legal sleight of hand.

This is another example of a Brussels power grab. If Article 122 — or any other provision — can be stretched to justify the seizure of foreign sovereign assets and the imposition of massive liabilities on unwilling member states, it can be used to circumvent unanimity across a wide range of foreign policy decisions.

The threat, however, worked. On Friday, at the European Council meeting, the Commission failed to secure an agreement on the use of the frozen Russian assets. Instead, it secured agreement on a separate €90-billion loan, backed by the EU budget and underwritten by all member states except three (Hungary, Slovakia and the Czech Republic), which were granted opt-outs. In effect, the political obstacle was bypassed not by changing strategy, but by shifting the financial risk directly onto European taxpayers. As von der Leyen made clear in advance of the summit, there was little room for dissent: “No one will leave the EU summit until the issue of Ukraine’s financing is resolved.”

Incredibly, the deal foresees that the loan will have to be repaid by Ukraine only if and when Russia agrees to pay war reparations — effectively transforming hypothetical future reparations into immediate financing. This idea is, at best, wishful thinking. It is highly unlikely that Russia would accept binding reparations even in the event of a peace deal, meaning that there is little chance Ukraine will ever repay the loan. This is all the more striking given how much Europe has already spent: EU parliaments have approved at least €187 billion in support for Ukraine, on top of massive indirect costs.

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This episode illustrates how the EU operates: by manufacturing false binaries that foreclose genuine political choice. Member states were presented with a stark alternative — either agree to confiscate Russia’s frozen assets or be prepared to collectively underwrite a massive new loan. What was never seriously considered was a third option: to stop pouring money into a demonstrably failed strategy and instead work to bring the war to an end through negotiations.

Yet it’s easy to see why the EU can’t afford to confront the failure of its Ukraine strategy — one that has inflicted immense economic damage on Europe while delivering nothing on the battlefield, and that has left Ukraine in a worse position than at the start of the war. Acknowledging this reality would carry enormous political costs for EU elites, particularly those most invested in the victory-at-all-costs narrative — hence their determination to keep the war going at all costs. This is why, even after failing to agree on confiscation, Brussels pushed through a massive, budget-backed loan as a substitute. The consequences will be dear: Ukrainians will continue to suffer and die in an unwinnable war, while Europe will remain entrenched in a permanent state of economic warfare and military-by-proxy confrontation with Russia, with a constant risk of escalation into direct conflict.

If there is a silver lining to this grim trajectory, it is that the recklessness of these choices will only exacerbate the contradictions of a project that is pushing the continent to the brink, ultimately forcing a reckoning — within member states and among Europe’s citizens alike. Indeed, the Commission may have succeeded in avoiding a catastrophic humiliation, but in doing so it exposed the increasingly authoritarian nature of the Union, willing to override national interests and discard legal constraints, democratic norms and basic economic rationality in pursuit of ideological crusades. Meanwhile, the enormous financial burden imposed by the latest deal will only deepen internal fractures and push national budgets to the breaking point — especially when it becomes clear that it will entail yet more resources diverted from Europe’s own crumbling infrastructure, underfunded hospitals and overstretched schools.

And Ukraine is far from the only flashpoint. Brussels is also struggling to secure backing for the Mercosur free-trade agreement with Argentina, Brazil, Paraguay and Uruguay. Here, too, resistance is growing. France has long led the opposition, with Emmanuel Macron reiterating recently that the deal lacks reciprocity on production standards, pesticide rules and food safety. The front broadened significantly this week, when Italian Prime Minister Giorgia Meloni described the deal as “premature”, citing inadequate safeguards for European agriculture. Italy’s stance is pivotal, as it raises the prospect of a blocking minority in the Council that includes Poland, Hungary and Austria too.

Protests have added to the pressure. On Thursday hundreds of tractors converged on Brussels as farmers from across Europe denounced what they see as unfair competition. Proposed safeguards have done little to calm opposition — leading to the ratification of the deal to be postponed once again at the European Council.

And so, as the contradictions within the EU continue to accumulate, it is increasingly difficult to see how Brussels can manage the backlash for much longer. The Union is beginning to resemble a crumbling empire, reliant not only on repression, censorship and electoral manipulation to maintain control, but also on ever more aggressive tactics directed even against pro-EU governments themselves. By forcing through ever more reckless commitments in the name of unity, it is simply setting the stage for an even more catastrophic implosion down the road.

Chat Control, formally known as the Child Sexual Abuse Regulation, was first proposed by the European Commission in 2022. The original plan would have made it mandatory for email and messenger providers to scan private, even encrypted, communications — with the purported aim of detecting child sexual abuse material. 

The tool was sold as a noble crusade against some of the world’s most horrific crimes. But critics argued that the tool risked becoming a blueprint for generalized surveillance, by essentially giving states and EU institutions the ability to scan every private message. Indeed, a public consultation preceding the proposal revealed that a majority of respondents opposed such obligations, with over 80% of explicitly rejecting its application to end-to-end encrypted communications.

Yet despite repeated blockages, and widespread criticism for violating privacy and fundamental rights, the text was never abandoned. Instead, it was repackaged, and continually pushed forward from one Council presidency to the next. Each time democratic resistance stopped the original plan, it kept returning in new forms, under new labels, each time dressed up as a “necessary” and “urgent” tool to protect children online, yet always preserving its core logic: normalizing government-mandated monitoring of private communications on an unprecedented scale. 

In May, the European Commission once again presented its proposal. Yet several states objected. That included Germany, but also Poland, Austria and the Netherlands. As a result, Denmark, which currently holds the rotating presidency of the European Council, immediately began drafting a new version, known as “Chat Control 2.0” and unveiled earlier this month, which removed the requirement for general monitoring of private chats; the searches would now remain formally voluntary for providers. All this happened under the auspices of Coreper, the Committee of Permanent Representatives — one of the most powerful, but least visible, institutions in the EU decision-making process. It is where most EU legislation is actually negotiated; if Coreper agrees on a legislative file, member states almost always rubber-stamp it. 

The gamble worked. Yesterday, this revised version was quietly greenlit by Coreper, essentially paving the way for the text’s adoption by the Council, possibly as early as December. As digital rights campaigner and former MEP Patrick Breyer put it, this maneuver amounts to “a deceptive sleight of hand” aimed at bypassing meaningful democratic debate and oversight. 

While the removal of mandatory on-device detection is an improvement on the first draft, the new text still contains two extremely problematic features. First, it encourages “voluntary” mass scanning by online platforms — a practice already allowed in “temporary” form, which would now become a lasting feature of EU law. Second, it effectively outlaws anonymous communication by introducing mandatory age-verification systems. 

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An open letter signed by 18 of Europe’s leading cybersecurity and privacy academics warned that the latest proposal poses “high risks to society without clear benefits for children”. The first, in their view, is the expansion of “voluntary” scanning, including automated text analysis using AI to identify ambiguous “grooming” behaviors. This approach, they argue, is deeply flawed. Current AI systems are incapable of properly distinguishing between innocent conversation and abusive behavior. As the experts explain, AI-driven grooming detection risks sweeping vast numbers of normal, private conversations into a dragnet, overwhelming investigators with false positives and exposing intimate communications to third parties. 

Breyer further emphasized this danger by noting that no AI can reliably distinguish between innocent flirtation, humorous sarcasm — and criminal grooming. He warned that this amounts to a form of digital witch-hunt, whereby the mere appearance of words like “love” or “meet” in a conversation between family members, partners or friends could trigger intrusive scrutiny. This is not child protection, Breyer has argued, but mass suspicion directed at the entire population. Even under the existing voluntary regime, German federal police warn that roughly half of all reports received are criminally irrelevant, representing tens of thousands of leaked legal chats annually. According the Swiss Federal Police, meanwhile, 80% of machine-reported content is not illegal. It might, for example, encompass harmless holiday photos showing nude children playing at a beach. The new text would expand these risks dramatically. 

Further concerns arise from Article 4 of the new compromise proposal, which requires providers to implement “all appropriate risk mitigation measures”. This clause could allow authorities to pressure encrypted messaging services to enable scanning, even if this undermines their core security model. In practice, this could mean requiring providers such as WhatsApp, Signal or Telegram to scan messages on users’ devices before encryption is applied. 

The Electronic Frontier Foundation has noted that this approach risks creating a permanent security infrastructure, one which could gradually become universal. Meta, Google and Microsoft already scan unencrypted content voluntarily; extending this practice to encrypted content would merely require technical changes. Moreover, what begins as a voluntary option can easily become compulsory in practice, as platforms face reputational, legal and market pressure to “cooperate” with the authorities. Furthermore, this doesn’t affect just people in the EU, but everyone around the world, including the United States. If platforms decide to stay in the EU, they would be forced to scan the conversations of everyone in the bloc. If you’re not in the EU, but you chat with someone who is, then your privacy is compromised too. 

Another major danger is the introduction of mandatory age-verification systems for app stores and private messaging services. Though the Council claims these systems can be designed to “preserve privacy”, critics insist that the very concept is technologically unworkable. Age assessments inevitably rely on biometric and behavioral data, both of which require invasive data collection. Far from protecting children, these systems would increase the volume of sensitive personal information being stored and potentially exploited. 

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Requiring official identity documents for online verification would exclude millions of people who lack easy access to digital IDs or who won’t provide such sensitive documentation merely to use a messaging service. In practice, this would spell the end of anonymous communication online, forcing users to present ID or face scans simply to open an email or messaging account. Breyer has warned that such measures would be particularly disastrous for whistleblowers, journalists, political activists and others reliant on online anonymity. It would also push under-16s towards less safe, poorly regulated alternatives that lack encryption or basic safety protections. 

Ultimately, critics argue that mass surveillance is simply the wrong approach to combating child sexual exploitation. Scanning private messages does not stop the circulation of child abuse material. Platforms such as Facebook have used scanning technologies for years, yet the number of automated reports continues to rise. Moreover, mandatory scanning would still fail to detect perpetrators who distribute material through decentralized secret forums or via encrypted archives shared using only links and passwords — methods that scanning algorithms cannot successfully penetrate. The most effective strategy would be to delete known abuse material from online hosts, something Europol has repeatedly failed to do. 

Chat Control, in short, would do little to actually help victims of child sexual exploitation while harming everyone else. Every message would become subject to surveillance, without any judicial oversight, contrary to long-standing guarantees of private correspondence. There’s a legal question here too. The EU Court of Justice has previously ruled that general and automatic analysis of private communications violates fundamental rights, yet the EU is now poised to adopt legislation that contravenes this precedent. Once adopted, it could take years for a new judicial challenge to overturn it. 

The confidentiality of electronic communication — essential for personal privacy, business secrecy and democratic participation — would be sacrificed. Sensitive conversations could be read, analyzed, wrongly flagged or even misused, as past scandals involving intelligence officials and tech employees have shown. One of the most notorious cases of intelligence abuse came from the US National Security Agency, in which multiple NSA employees were caught using the agency’s powerful surveillance tools to spy on romantic partners and ex-lovers. Leaked documents have also shown that the UK intelligence agency GCHQ captured and stored images from Yahoo webcam chats, including millions of sexually explicit images of completely innocent users. There have also been several cases of Big Tech employees — from Google to Facebook — using internal tools to spy on unsuspecting users. 

Furthermore, secure encryption, a foundation of cybersecurity, would be compromised by introducing backdoors or client-side scanning tools that foreign intelligence services or criminal actors could exploit. At the same time, the responsibility for criminal investigations would shift from democratically accountable authorities to opaque corporate algorithms, with minimal transparency or oversight. 

Opponents therefore argue that the EU should instead adopt a fundamentally different approach: one that protects children without undermining fundamental rights. They propose ending the current voluntary scanning of private messages by US internet companies — restoring the principle that targeted surveillance requires a judicial warrant and must be limited to individuals reasonably suspected of wrongdoing — and maintain that secure end-to-end encryption, and the right to anonymous communication, must be preserved. 

Particularly worrying is the issue of function creep, the process by which a technology introduced for a narrowly defined purpose gradually expands to serve broader, and sometimes entirely different, purposes over time. The UK’s Online Safety Act, passed in October 2023, obliges firms to develop child sexual abuse detection systems, even though the British government itself admits that such infrastructure is not yet technically available, creating legal authority awaiting technical capability. In the United States, “temporary” surveillance measures introduced under the post-9/11 Patriot Act became permanent, and indeed expanded in scope. Once a technological infrastructure for comprehensive online surveillance exists, it can easily be repurposed and is hard to dismantle. Technologies designed to detect harmful content can quickly be extended to political repression; examples from authoritarian states demonstrate how similar systems are used to identify and target dissidents. 

Breyer summarized this pattern starkly: “They are selling us security but delivering a total surveillance machine. They promise child protection but punish our children and criminalize privacy.” The implications are ominous. Europe effectively stands on the threshold of building a machine that can see everything. Once constructed, it will serve not only the current political authorities — the idea of Ursula von der Leyen spying on everyone’s messages is disturbing enough — but whoever wields power next. With yet another vote approaching, the window to stop Chat Control is narrowing. 

This time, however, there was only silence until the full 28-point plan appeared. The effect was compounded by the extremely tight deadline. Volodymyr Zelensky and his government were allowed a mere seven days — until 27 November — to accept or refuse the proposal: just one of whose requirements, Ukraine’s withdrawal from active battlefields where its troops are even now fighting the Russian advance, would justify prolonged deliberations to say the least.

The very first official European reaction to Trump’s plan only made matters worse. Taking time out of a pointless G20 summit in failing South Africa — without American, Chinese, or Russian leaders present — Ursula von der Leyen reminded the US that since the invasion of Ukraine in February 2022, now 1,000 days ago, Europe had donated a total of €181 billion, including grossly over-priced weapons, to help Ukraine. That happens to amount to less than 1% of the €19.99 trillion that makes up the combined annual GDP of the European Union.

As against that, the US has spent a combined total of $175 billion on Ukraine since the start of the war, while concurrently devoting a great deal to defend China’s Asian neighbors — from Japan and Taiwan, to scattered island republics in the Pacific — from non-stop provocations. These include everything from the 500-boat intrusions of Chinese “fishing militias” to outright aggressions by Beijing’s rapidly expanding armed forces.

The Europeans constantly forget, just as the Americans constantly remember, that the world does not start or end in Europe, and that China not only presents a direct military threat to US allies — recall those frequent naval intrusions — but is also the opportunistic hotel burglar of our age. It does not smash its way into countries, but tries to open every door as it goes down the corridors of the world, with promises, gifts, loans, or bribes, before suddenly presenting the geopolitical bill. Consider what happened in Sri Lanka, where Beijing tried to convert a harbor-construction loan into a Chinese naval base, sited to threaten both Indian coasts.

To understand Trump’s abrupt 20 November announcement, alongside that shockingly sudden 27 November ultimatum, it is also necessary to invoke yet another date: 6 May, 2025. This was the day when the President, returning from the Persian Gulf, received a full US Navy briefing about the fight with the Shi’a Houthi rebels in Yemen, which he promptly called off, once he heard the essential facts.

Funded by Iran and armed with many anti-ship drones — as well as anti-ship and ballistic missiles sent by Iran — the Houthis quickly joined Hamas’s October 7 attack against Israel: attacking ships in the Red Sea, coming or going to the Suez Canal.

In theory, the Houthis were supposed to attack Israeli ships, or ships sailing to Israel, but in practice Israel receives very little sea freight via the Red Sea, and sends even less: almost all its exports consist of high-end electronics, pharmaceuticals and polished diamonds, all much too valuable to be sent by anything slower than air freight. Israel’s only bulk import — oil from its ally Azerbaijan — comes via the Mediterranean. So the Houthis used their Iranian drones and missiles to attack other ships, damaging many and sinking some.

Because the world’s shipping insurance companies promptly raised their rates, shipping via the Red Sea and Suez Canal fell steeply, as more and more ships to and from Asia avoided the danger by going all the way round the Cape of Good Hope and the great bulge of West Africa. Thus the most important of commercial routes, from Shanghai to Rotterdam, was extended by some 4,900 nautical miles, adding roughly 12 extra days to the average journey.

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For some trades, the extra costs were easily absorbed, and for others they were fatal. But the losses to Europe’s Mediterranean ports and the cities that depend on them — Barcelona, Marseille, Genoa and Gioia Tauro among others — caused by the loss of traffic was absolute: Europe’s freight now arrived in Rotterdam or Antwerp and continued to French, Italian and Spanish cities by rail, leaving the Mediterranean ports bereft of Asian traffic.

By then, Trump had heard that the fight with the Houthis was extremely expensive for the US Navy. Its destroyers, built to defend its multi-billion aircraft carriers from Russian and Chinese anti-ship missiles, only had $2.5-million “standard missiles” to attack Iran’s cheap drones and crude anti-ship missiles, themselves copied from older Chinese designs.

It was at that point in the US Navy briefing that Trump asked about European navies and their role in fighting the Houthis.  When he heard that just the Mediterranean navies of France, Italy and Spain — had some 200 combat vessels including aircraft carriers, he naturally asked how many of their ships were fighting the Houthis. And he was genuinely shocked by the answer: almost none.

All three countries had refused to join the suggestively named Anglo-American “Prosperity Guardian” mission because it involved some air attacks against Houthi weapon depots. This reticence disregarded the fact that the Houthis were not Yemen’s government but merely rebels. Either way, after doing nothing, the EU navies stationed two small ships in the upper Red Sea under the hugely over-publicized “Aspides” mission, which intercepted a total of four Houthi ballistic missiles, alongside 18 drones. Compare this to the 400 drones and missiles intercepted by the US Navy, all at 100 times the cost.

Upon receiving this information, Trump did not ask his National Security Advisor Marco Rubio, who is also the Secretary of State, to convene a meeting to discuss US options: he simply ordered the US Navy to immediately abandon the Prosperity Guardian fight against the Houthis, supposedly employing some choice language about the idiocy of exhausting US naval missile stocks to safeguard the commercial freight of Nato Mediterranean countries: whose own warships lolled idly by instead of defending their commerce.

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All this set the stage for Trump’s new approach to the Ukraine war. America had just helped Israel defeat Iran — as well as its proxies, the Assad regime of Syria, Hezbollah and Hamas — with a total military aid budget of $3.8 billion: or less than 0.5% of total US military spending. The Israelis, for their part, had immediately mobilized 700,000 active-duty troops and reservists after the war started on October 7, out of a total of  7.7 million Israeli Jews and Druze subject to military service.

As for Ukraine, its population still exceeds 36 million. Yet its army has never exceeded a million soldiers. Millions of Ukrainians of military age have not served a day in uniform, with some having bought exemptions and others having fled to Poland, Germany or as far afield as Thailand. Yet all this pales in comparison with Ukraine’s EU allies. Despite including 450 million inhabitants, or 5.5% of the world’s population, it has just 1.5 million men in uniform. That number reaches 1.9 million counting paramilitary forces, every one of whom eats three meals a day in their camps, barracks, bases and ships at sea — but none of whom are available to fight.

And the number of EU troops sent to Ukraine? Zero. That is ultimately why the Trump plan has made its concessions to Putin. It is not a pretty spectacle to see Washington replacing unconditional support for Ukraine with an ultimatum to end the war or else. But it really must focus on the global Chinese threat, especially when the Europeans have proved such unreliable partners.

Besides the EU, or more likely a compact of major European countries, could easily take full control of the situation if they wished: by simply sending troops to help Ukraine, if only for logistical support and equipment repair well behind the front. This would pose very little risk to themselves, while releasing Ukrainians for combat roles and immediately changing attitudes to the EU — or at least to the contributing nations — in the White House and in the US Congress.

If even that is too much, the EU’s entire machinery of pretended military strength will be exposed as a fraud, and so will its claim to challenge White House priorities, shaped by global rather than just European realities.

The plan, first circulated on a Telegram channel, is clearly not a great one for Ukraine. But, equally, it isn’t a “capitulation” and those who have described it as such don’t really want a deal. Ukraine will be able to improve on it. But, admittedly, not by much. “You don’t have the cards,” Trump once told Zelensky. Unfortunately, after the recent corruption scandal, his hand is weaker than ever.

Over the past three years, US officials have repeatedly told me that Ukraine has no chance of winning the war. And after America withdrew support earlier this year, it was clear that they had a point: Europe was in no position to plug the gap. Europeans might be the self-righteous defenders of the fast-collapsing multilateral world order, but history will record that when push came to shove, they weren’t ready to put their money where their mouth was. On average, the total support for Ukraine was around €4 billion per month during the first half of the year. In July and August, it collapsed to under €1 billion per month, according to the Kiel Institute. No major European country has been willing to cut spending or raise taxes to fund Ukraine meaningfully. The Europeans’ strategy, such as it was beyond photo-ops with Zelensky, was to keep the Russians fighting until they got tired. Unfortunately, America tired first. And Europe had no Plan B.

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Now Europe is out of money and out of ideas. And Trump does have a plan. He has been playing the long game. His tough talk against Vladimir Putin was merely tactical, intended to mask a long-term strategy to force an end to the war. As Phillips O’Brien has suggested, in his “Long Con” analysis, even Trump’s secondary oil sanctions were part of this gambit. These were supposed to take effect on 21 November. And yet nothing happened. India and China can continue buy Russian oil with impunity. The sanctions were never serious.

Trump has a singular priority — to end the war, whatever it takes. And he has two major advantages in this bid. One is Ukraine and Europe’s military dependence on the US. The other is America’s unique status as the only influential Western power with direct diplomatic channels with Moscow. The Europeans committed a huge strategic blunder when they simultaneously ended their conversations with Vladimir Putin.

And so Trump’s 28-point plan was negotiated by Steve Witkoff with his counterpart in Russia, Kirill Dmitriev. Admittedly, it does have the feel of a work in progress: the leaked version was written in Russian and, when translated into English, is clumsy. It is detailed, but by no means a formally agreed text.

There are, though, some non-negotiable elements. One is the territorial agreement which would give Russia a part of Ukraine it does not yet occupy. Russia already holds almost 90% of the entire Donbas region — all of Luhansk, and roughly three quarters of Donetsk. Trump’s peace plan would hand Russia the remaining territory of Donetsk, along with the 200,000 Ukrainians who are still resident in the Ukrainian-controlled parts of the oblast. Under the plan, the territory would be demilitarized and become part of a buffer zone.

Trump’s team accepted this because they concluded, correctly, in my view, that without it there would be no deal. Putin would have continued to fight and eventually captured more territory. Russia has been making advances: it recently managed to occupy the vital frontline town of Pokrovsk. It could take another year for Russia to capture the remainder of Donetsk, before it went for the big prize: Zaporizhzhia, a city with approximately 700,000 inhabitants, and the capital of the region that bears the same name. At that point, Ukraine’s future independence could could no longer be assured.

This peace deal, though, is not as one-sided as its critics say. It formally recognizes the sovereignty of Ukraine, and its right to join the EU. It also allows Ukraine to maintain an army, capped at a reasonable 600,000 troops. Nor does restrict NATO countries from providing further assistance, except for certain weapon categories like long-range missiles.

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But there are some real curveballs. I almost fell off my chair when I read Point 14, which suggests the investing of $100bn of Russia’s frozen assets in the reconstruction of Ukraine — with the US taking half of the profits. This is classic Trump: playing commercial games which are beyond the imagination of our European diplomats. In addition, Europe would be obliged to pay $100bn of assistance from their own pockets. There will be a US-Russian investment fund to finance joint American–Russian projects, with profits shared.

But most importantly, the deal forces Europe to unfreeze the $200 billion in Russian assets currently held in European accounts, mostly in Belgium. This is a bitter pill; Europe had hoped it could use the Russian money as collateral for Ukraine loans. Trump has no authority to force Europe to release the funds — Friedrich Merz already said No to this demand — but he could make life difficult if it refuses.

Europe’s only semi-coherent strategy regarding Ukraine had been to withhold these assets as leverage for future reparations  — a plan built on the fiction that Ukraine would win this war. But if Russia and Ukraine end up agreeing a deal, this scheme would be rendered unworkable, since would be a tool with which the Europeans could sabotage the deal.

Another red-line in the peace deal is the gradual lifting of sanctions. Readmitting Russia to the Group of Seven advanced industrial nations — making it the G8 again — would be painful for the Europeans. Russia was expelled in 2014, after Russia annexed Crimea. A revived G8 would effectively be ruled by Trump and Putin.

No surprise, then, that EU leaders at the G20 summit in South Africa this weekend issued a statement to say that they wanted to make a counterproposal, designed primarily to frustrate Trump’s plan. They insisted on a ceasefire — a non-starter. And after senior US and European officials met in Geneva on Sunday, they said they had made some progress but gave no details.

Ukraine, by contrast, made some positive noises about a new version of the deal. The Kyiv Independent quoted a senior US official saying that the plan had been drawn up with Rustem Umerov, the secretary of the National and Security Council of Ukraine, and one of Zelensky’s closest aides. Umerov reportedly agreed to the majority of the deal, after making several modifications, which he then showed to Zelensky.

Domestic attitudes in Ukraine are also shifting. I noted a post from Iuliia Mendel, Zelensky’s former press secretary and staunch defender of Ukraine. Over the weekend she tweeted: “My country is bleeding out. Many who reflexively oppose every peace proposal believe they are defending Ukraine. With all respect, that is the clearest proof they have no idea what is actually happening on the front lines and inside the country right now.” She is absolutely right in her observation that the loudest supporters of Ukraine in Europe are those with no understanding whatsoever of the military reality on the ground.

So will the Europeans encourage Zelensky to keep on fighting? I am sure they will try. But I am not sure they will succeed. Ultimately, they will back down.

Because if Ukraine were to reject the deal, Trump would formally disconnect his remaining military aid and intelligence support to Ukraine. The country relies on this as its early warning system for any incoming attacks as well as guiding its own strikes on Russian infrastructure.

Trump could go even further and renounce US responsibility for Europe’s security, on the grounds that the continent is taking unacceptable risks. The Europeans know this, of course. While outwardly, they may give an impression of defiance, their actions suggest otherwise. After Trump imposed tariffs on European imports this summer, the EU folded and agreed to a big increase in military spending. If Europe really wanted independence from the US, it would have created a defense procurement union, with a “Buy European” mandate and started to reorganize its militaries. None of this is happening. Nor will it. This is the problem with the multilateral crowd. They care too much about procedures.

We can expect a good deal of huffing and puffing coming from European capitals over the next few days. Leaders will insist that they are retain sovereign decision-making. Legally, this is true. The US has no rights to decide the fate of Russian assets held in Europe.

But this is not a legal dispute, it is a political one. Europe never had a viable strategy for the war — and now it’s becoming clear it has no strategy for peace either. The Europeans have no choice but to make a deal: they have no cards left to play either.

As part of the Democracy Shield, the Commission proposes the creation of a Monitoring Center that would identify and remove “false content” and “disinformation” from the internet. As Henna Virkkunen, Executive Vice President for Security and Democracy, stated, the Shield will enable Europe to “respond faster and more effectively to information manipulation and hybrid threats”. The EU’s High Representative for Foreign and Security Policy, Kaja Kallas, made no secret of the anti-Russian nature of the initiative: “we are seeing campaigns, including from Russia, specifically designed to polarize our citizens, undermine trust in our institutions and pollute politics in our countries.”

The term “independent” appears repeatedly in the press release. A new “independent European network of fact-checkers” will be set up in all official EU languages, while the European Digital Media Observatory (EDMO), the EU’s flagship “fact-checking” network, financed to the tune of almost €30 million, will gain new “independent” analytical powers to monitor elections and crisis situations. But, remember, independence in Brussels translates to financial dependence on the Commission. Indeed, to guarantee this “independence”, the Commission promises generous funding to “independent” NGOs and media outlets.

The Democracy Shield builds upon the recent Digital Services Act (DSA), the most sweeping internet regulation ever implemented in Europe. In theory, these initiatives are meant to protect democracy; in practice, they do the opposite. Their aim isn’t to “fight disinformation”, as claimed, but rather to control the narrative at a time when Europe’s political elites are facing unprecedented levels of public distrust, by centralizing control over the flow of information and imposing a single “truth” defined by Brussels. In short, the European Commission is building a continent-wide censorship machine

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As one EU diplomat recently put it, in truly Orwellian fashion: “Freedom of speech remains for everyone. At the same time, however, citizens must be free from interference.” But who decides what constitutes “interference”? Who determines what is “true” and what is “fake”? The same institutions and corporate media outlets that have repeatedly engaged in fearmongering and disinformation themselves. Just a few weeks ago, Ursula von der Leyen claimed that the GPS system on her plane had been jammed by Russia — an allegation quickly debunked by analysts. Meanwhile, the BBC, often held up as a paragon of journalistic integrity, was recently caught editing footage of a Donald Trump speech to make it appear more extreme.

The EU claims to be protecting citizens from “falsehoods” but on what democratic or moral basis does the Commission assume the authority to decide what is true, especially when it is clear that the EU’s political-media establishment itself engages in disinformation and propaganda on a regular basis? Moreover, when so-called independent fact-checkers are hand-picked and financed by the Commission itself, the result is a closed feedback loop: the EU funds institutions that then “verify” and amplify the EU’s own narratives. The Democracy Shield, like its predecessors, thus institutionalizes the power to define reality itself.

In a series of reports, I have shown that the European Union already operates a vast propaganda and censorship apparatus that spans every level of civil society — NGOs, think tanks, the media and even academia. The cornerstone of this system is a network of EU-funded programs — notably CERV (Citizens, Equality, Rights and Values), Creative Europe and the Jean Monnet initiative — that collectively funnel billions of euros into organizations that are, in theory, “independent” but are in fact deeply enmeshed in the Brussels machine.

Through the CERV program alone — which boasts a budget of almost €2 billion for 2021-2027 — more than 3,000 NGOs have received funding to carry out over 1,000 projects. Officially, these funds promote “European values”. In practice, they finance progressive and pro-EU activism: gender ideology, multiculturalism, anti-nationalism and “countering Euroscepticism”. Many projects are explicitly designed to “increase trust in the EU” or “counter anti-EU narratives”. Meanwhile, NGOs in Central and Eastern Europe are generously funded to “combat autocratic narratives” and “challenge Euroscepticism”, often directly targeting governments in Poland (under the previous executive) or Hungary — external influence strategies not unlike those historically associated with agencies like USAID.

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The result is a pseudo-civil society — a network of nominally “grassroots” actors functioning as proxies for the Commission, amplifying its agenda and manufacturing the illusion of popular support for its policies.

The same pattern applies to the media. My research has shown that the EU channels at least €80 million annually directly to newspapers, broadcasters, news agencies and “journalistic partnerships”— amounting to nearly €1 billion over the past decade. Programs such as IMREG (Information Measures for Cohesion Policy) have paid media outlets to publish articles praising EU cohesion funds, in some cases without even disclosing that the content was EU-financed. The Commission calls it “raising awareness”. In any other context, it would be called covert advertising or propaganda.

The EU’s propaganda machine extends into academia as well. Through the Jean Monnet program, the Commission allocates about €25 million a year to universities and research institutes worldwide, financing over 1,500 Jean Monnet Chairs in 700 institutions. The goal is not to support independent scholarship but to embed pro-EU ideology into higher education. Official documents state explicitly that recipients are expected to act as “ambassadors of the European Union” and “outreach agents” engaging with media and NGOs. The academy has effectively been transformed into an ideological instrument.

With the Democracy Shield, the Commission now intends to vastly expand this machinery. It proposes to not only establish what amounts to a de facto Ministry of Truth, but also to inject even more money into NGOs, “independent” media and fact-checking networks tasked with promoting “European values”. Von der Leyen is, in effect, buying consensus — and using citizens’ own money to do it — collapsing the boundaries between the European super-state, media, civil society and academia.

And if the EU’s goal, here, were merely to manipulate narratives, that would be alarming enough. But the pattern now points towards direct interference in electoral processes. We have already seen this play out in countries like Romania and Moldova, where local elites — with open or tacit support from Brussels — invoked the specter of “Russian interference” (without providing much evidence) to justify blatant manipulation of domestic elections. In Romania, authorities canceled an election and barred the leading populist candidate from running. In Moldova, pro-EU authorities used “security concerns” to prevent Russia-leaning expatriates from voting. Protecting democracy thus becomes the pretext for suspending it, even as the Democracy Shield explicitly foresees strengthening the European Cooperation Network for Elections and, ominously, promoting “systematic exchanges on the integrity of electoral processes”.

The Commission’s appetite for control is not limited to information and elections. Ursula von der Leyen recently also initiated the creation of a new intelligence unit under the direct authority of the European Commission. The goal, according to the Financial Times, is to unify intelligence data from member states and “enhance the EU’s ability to detect and respond to threats”. The plan foresees the eventual creation of a European intelligence cooperation service, effectively a supranational agency that would operate alongside national intelligence services. Officially, it would enhance “strategic autonomy”. In practice, it would likely function as a subsidiary of Nato and, by extension, of the CIA, especially since the same proposal explicitly calls for “strengthening EU-NATO cooperation”.

It points to a broader worrying trend of power centralization in the hands of the Commission — and of von der Leyen personally. Understandably, many observers find the prospect of giving “Empress Ursula” an army of supranational spies — operating beyond the oversight of national parliaments — profoundly disturbing. Giving an unelected, opaque institution like the Commission its own intelligence apparatus would mark yet another milestone in Europe’s transformation into a techno-authoritarian juggernaut — one that surveils not foreign enemies, but its own citizens.

Seen in this context, the Democracy Shield appears like nothing more than a tool to further institutionalize a regime of managed speech and narrative control. Its goal is to police online speech according to vague, politically charged definitions of “disinformation”; to compel platforms, journalists, academics and citizens alike to conform to a narrow, Commission-approved worldview; and to silence dissent in the name of “fighting foreign interference”. Yet it is becoming increasingly clear that the real war on democracy isn’t being waged by Moscow or Beijing; it is being waged from within, by the very institutions claiming to defend it.

Italy’s prime minister may have started as an anti-European, but she governs today as a pro-European moderate — or, as she would say, a “euro-realist”. And the received wisdom in Europe is that the French far-Right will do the same. But this is to fundamentally misunderstand Le Pen’s National Rally. Her party could not be more different from Meloni’s Brothers of Italy. For one thing, the two have occupied opposing positions on the political spectrum — particularly on Nato and Europe. To expect the French far-Right to ape Meloni’s softening stance, then, is to fall prey to the fallacy of composition.

Meloni has been on quite a political journey. She entered politics in the Nineties as a youth activist for Italian Social Movement: the postwar neo-fascists. In 1995, its leader, Gianfranco Fini, reconstituted the party as the National Alliance — a new iteration which embraced liberal democracy, membership of Nato, and European integration. It was Fini, not Meloni, who turned Italy’s far-Right into a pro-European, pro-Establishment movement. He later became one of Silvio Berlusconi’s most senior ministers and one of the most pro-European voices in his cabinet.

In 2009, Fini merged his National Alliance into Berlusconi’s party, and then, in 2012, Meloni left the group to become leader of a new party: the Brothers of Italy. Her party was further to the Right than Fini, but still rejected fascism. And Meloni was a euroskeptic, very much in the mold of Britain’s British Conservatives pre-Brexit. But she has played the bloc to her advantage, and Italy is increasingly seen as a credible and stable partner.

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Things couldn’t be more different in France, where the towering figure of the far-Right is Marine Le Pen, president of National Rally. Though she is currently banned from standing for political office for five years, this has not affected her party’s ratings. Her 30-year-old protégé, Jordan Bardella, has assumed leadership and is currently polling between 35 and 37.5% of voting intentions in the first round of the next presidential elections. The second-placed candidate is the former prime minister Édouard Philippe, who is at 15-19.5%. While it is hard to translate these numbers into second-round votes, for the first time it does look like the far-Right has a real crack at winning the French presidency.

The party has come some way since it was founded by Marine’s father, the late Jean-Marie Le Pen, in 1972 as the National Front. It took a hard line on membership of the European Economic Community — as it was then called — on the grounds that it constituted a threat to French sovereignty. Le Pen Snr later rejected the single market, the euro, and Schengen. But he never got close to power.

His clan, though, still rules. And its ideology still holds. Under Marine’s leadership, the party’s position on Europe did seem to soften a little. She still wanted to exit the euro and Schengen, but not the EU itself. Instead, she wanted to renegotiate treaties. In practice, of course, this would not have been possible, so her position was never fundamentally different from Frexit — except in tone.

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Le Pen doubled down on her euro exit theme in the elections of 2017, and lost to Emmanuel Macron — the extremism of her narrative clearly contributing to her defeat. So, in 2018, she renamed the party National Rally and changed its message from exiting the EU altogether, to reforming it from within. Superficially this might sound like a Meloni shift. But in reality, it means something different, which became brutally clear in last year’s parliamentary elections.

After National Rally scored won a landslide victory — its biggest yet — in the 2024 European elections, Macron called a snap election for the French National Assembly. Bardella assumed charge of the party and, at one point during the campaign, it did look on the verge of achieving a political majority. This was only thwarted at the last minute when, panic-stricken, the opposition parties formed an alliance to force the far-Right into third place.

But over the course of those two elections, the party’s position on European integration hardened significantly. With Bardella as leader, he called for a referendum to reaffirm the primacy of the French constitution over European law and during the European campaign he came up with the idea of a stratégie tricolore: a menu of European integration dishes from which France would order as it saw fit.

The green category represents the European integration the party approves of — so, industrial policies, and scientific exchanges. The orange category contains those policy fields France would want to renegotiate — such as Schengen and the single market. And the red category holds the hard no-go areas — migration, energy, defense, borders. Bardella wants to prioritize French citizens for jobs, and reverse free movement. Tell me that you want to leave the EU, without telling me that you want to leave the EU. That’s Bardella.

His agenda is clearly incompatible with EU membership. In the past, the EU has displayed a good deal of forbearance when confronted with French rule-breaking — for example on fiscal deficits. But this goes too far. The EU could never accept a French proposal to change freedom of movement unilaterally. So while the National Rally might not campaign on a leaving the EU platform, it will end up breaking so many of its rules that a Frexit would be the only way to deliver on its campaign promises.

If you were left in any doubt, here’s more. In an interview with The Economist last week, Bardella said he wants the ECB to buy French debt. France is Europe’s largest debtor — and the debtor with the greatest exposure to investors from outside Europe. Technically, the ECB could do this. It has a tool it calls the “transmission protection instrument”, which would allow it to buy French bonds during a financial crisis. The argument in favor of a central bank bailout is that France is simply too big to fail. As president or prime minister, Bardella could threaten the ECB with a unilateral default.

It is easy to dismiss his comments as utter nonsense, as one French economist did in a conversation with me last week. I take it seriously, though, because a French government under Le Pen or Bardella could take Europe to the brink. France is a powerful agent. It is not Greece. Or Italy. Bardella also wants an EU budget rebate, like Margaret Thatcher once did. This would push an under-resourced EU that has over-committed itself on Ukraine into an existential crisis.

Such a scenario could not be more different from what happened in Italy under Meloni. Italy has constitutional safeguards in place against a unilateral withdrawal from the euro and international treaties. Meloni’s pragmatism makes perfect sense. She is attempting to make the bloc work in Italy’s interests. It is quite a different scenario in France where the constitution gives the President powers that are without parallel in west European democracies. The EU would not break up the moment the National Rally got into power. But there would be cardiac arrest soon afterwards.

It is wrong, then, to link the shape of this future ideological project to Trump himself. His political future is uncertain. But the dissatisfaction, as well as a peculiar ideological mélange, that Trump defined is not going to go away: regardless of what happens to the man himself. Individuals certainly matter in history, but deep economic and political currents matter at least as much. After four years of Trump’s first presidency, policies that, in the beginning, appeared unusual, have been adopted by the rest of the body politic. They remained, and were even developed, after his first term. Thus the new political and economic order is already here. Trump’s second administration is continuing along the same path, and even accelerating the change.

When Trump waged a trade war with China in 2017, it was an unusual idea with very little prior support from the political class. It has since become more broadly defined, more elaborate in content, and accepted across the entire American, and increasingly European, political spectrum. It has an economic component (China is responsible for the decline of the American middle classes), a military interest (US security in Asia is jeopardized by China’s rise), and a political agenda (China is run by a dictatorial regime). The last two parts were “developed” after Trump left office in 2021, a further confirmation of the near-universal acceptance of this new thinking.

Recourse to trade wars or sanctions of individual entities or persons expanded under Trump — for instance, the reintroduction of a tough sanction regime against Cuba, increased sanctions against Iran and Venezuela — but that policy was not discontinued under President Biden. In fact, nothing changed either in policies with respect to Cuba, Iran and Venezuela, while a multitude of new sanctions were introduced against Russia, China, North Korea, Yemen and other nations. The United States has dozens of sanction regimes that affect perhaps thousands of individuals. Economic coercion is now considered a normal part of the international economic policy toolkit.

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The mercantilist approach to foreign trade, and the view of markets as solely the terrains of contestation and combat, is something that we can define as a “businessman” view of economics: it sees economic activity as a permanent struggle; and does not see the “invisible hand” of the market that reconciles various interests. The businessman view is now much more widely shared than a decade ago. The influential Financial Times commentator and writer Rana Foroohar gave it a veneer of respectability in her 2022 book Homecoming; new mercantilism is promoted by influential circles in the United States and the European Union, often under the guise of the need for greater geopolitical or military security. 

Bradford DeLong, a former US undersecretary of the Treasury under Bill Clinton, has come out defending industrial policies on the basis of national security, even using, out of context, Adam Smith’s statement that “defense is much more important than opulence”. “Friend-shoring” favors investments in politically friendly countries and de facto divides the world into competing trade blocs, not different in any essential way from the division of the world into economic blocs that reached its peak in the interwar period. “Friend-shoring” is the Imperial Preference or Japan’s Co-Prosperity Sphere that dares not speak its name.

What people who are arguing for such policies forget is that the 180-degree turn in Western policies regarding protectionism, trade blocs, industrial policy and economic coercion has international consequences. The entire post-1945 system of Bretton Woods institutions was set around the principles of free trade. Until the massive trade liberalizations in 1980, it did not exclude the use of tariffs and other protective measures: but this had to be done within an international framework (first GATT, then the WTO). With the ascendancy of the Washington Consensus, economic policies became further liberalized. It will therefore be difficult, if not impossible, to explain to the rest of the world that the entire post-1945 system ought to be revised. Should, for example, the World Bank suggest to Nigeria that it should increase tariffs and join a trade bloc? 

Or, to put it differently, if a country does exactly that and the World Bank still argues for trade liberalization, how seriously can the World Bank argue for it while the US and Europe are raising tariffs and creating trade blocs? Given the pre-eminent importance of the political West in the design and running of international organizations, these changes cannot be looked at solely from the domestic angle, as if the previous neoliberal policies can be continued in other countries as before. The change in trade policies among the most powerful countries will inevitably have repercussions for the rest of the world, not only economically but also ideologically. One would need to define a new global paradigm for international organizations like the World Bank and the IMF. The idea, and execution, of limiting immigration and increasing deportation is not exclusive to Trump. But by speaking about it ceaselessly, he has made it enter the political lexicon. The wall against Mexico continued to be built after Trump left office the first time, while children were still held in cages. 

Now, “walling oneself off” from the rest of the world has become a politically acceptable approach globally. EU boats patrol the Mediterranean, where about 3,000 people die annually while trying to cross to Europe (the statistics are intentionally vague). Walls against immigrants have also been erected on the Greco-Turkish and Serbo-Hungarian borders. The EU’s approach is uniquely schizophrenic: it prides itself on being a multicultural and multinational union, but holds it acceptable to build walls and electric fences on its borders. Trump’s anti-immigration stance has not differed from that of Theresa May when she was the home secretary and prime minister in the UK or, Giorgia Meloni in Italy (who is building camps in Albania for immigrants imprisoned by Italian authorities similar to the El Salvador prisons used by the Trump administration).

Trump’s ethnonationalism, that in the US means anti-black and anti-Latino policies, is shared, as against “their” minorities, by numerous European political parties, from the Finns Party in Finland to the Freedom Party in the Netherlands, Le Pen’s Rassemblement National in France and Vox in Spain. It is when we put these ideas together — tariff wars; sanctions as a way to conduct economic policy; trade blocs; halts to immigration — that we can better appreciate that the new ideological package “proposed” by Trump is not just his own but is similar or the same as the “packages” already applied by many in the political West. And these “many” are not just the so-called populist parties: smaller or larger parts of the “package” have been appropriated by the mainstream parties too.

A new set of political beliefs, unrelated to whether Trump is in power or not, has been created, and is likely to remain long after he is gone. One can see this clearly by listing four areas that are each in direct opposition to neoliberal ideas. First: instead of globalization, there are tariff wars and economic exclusion zones. Second: instead of economics being insulated from politics, there are politically motivated sanctions and state-led industrial policies. Third: instead of the aspiration to full mobility of people around the world, there are walls and fences. Fourth: instead of cosmopolitanism, as a desired ideology, there are openly nationalistic movements in positions of power.

There are also elements of neoliberalism that are likely to survive under this new ideological amalgam. It is, in Trump’s case, as already mentioned, a businessman’s approach to neoliberalism. It nevertheless has commonalities with standard neoliberalism: low taxation of high incomes and inheritance; tax preference given to incomes from capital vs incomes from labor; deregulation; limited state spending; no government interference in private matters (including rejection of affirmative action, gender-related policies and other attempts to level the playing field between different groups).

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The term that might be the most appropriate for this amalgam of ideas is “national market liberalism”. It includes parts of both classical liberal and neoliberal thinking when it comes to markets, but it rejects — or is at least skeptical of — other parts of the liberal project around civil equality. Further, it rejects the internationalism that was integral to both classical liberalism and neoliberalism. Hence, the “national”, a prefix I think indispensable. It may be deemed inconsistent to append the term “nationalist” to an ideology that was famously universalist, in favor of free global movement of goods, people, capital and technology. Quinn Slobodian, in his excellent book Globalists: The End of Empire and the Birth of Neoliberalism, traces the evolution of neoliberal thinking, and notes the distinction that its founders made — once they realized that the dream of a global neoliberal political federation is not achievable — between “imperium” that deals with political, cultural and symbolic matters, and “dominium”, an internationally regulated economic system within which the symbolic “imperium” is encased. The dominium ensured not only free movement of factors of production and goods and services, but also monetary stability and compatibility of legal norms. Liberals as well as neoliberals were always cosmopolitan or internationalist; their ambitions were not limited to one or two countries. The world as envisaged by fellow-Austrian political economists Ludwig von Mises and Friedrich Hayek was a borderless world. This is, as we have seen above, very far from the ideas that Trump and other challengers to neoliberalism have in mind.

The ideological amalgam that combines “national” with an ideology that is fundamentally internationalist is not a novelty. National socialism put together, not only in words, but in deed, the two elements that were considered incompatible: socialism, that was always internationalist, and nationalism. National Socialism proved that such a combination was possible and enjoyed enormous political success. Stalin’s “socialism in one country” can also be placed in the same group of systems. There, however, a communist party jettisoned internationalism and adopted Russian, or probably more exactly Soviet, nationalism. Domestically, though, it remained socialist.

Socialism shorn of its internationalist component produced national socialism in its Hitlerite and Stalinist versions. Global neoliberalism shorn of its internationalist component gives us a vision of the new emerging consensus: liberal policies limited to national markets and mercantilism abroad. This also, I believe, convincingly proves that the critics of the new consensus are wrong to call it “fascist”. Yes, it shares a nationalistic element with “fascism”, but not more so than mercantilist policies in general. Domestically, though, it eschews any socialistic element — nay, it explicitly rejects them — and in that respect it comes close to, or is indistinguishable from, neoliberalism.

***

This is an edited excerpt from The Great Global Transformation, which is published by Allen Lane on 6 November.

Attitude and aptitude explain why the US and China are the sole superpowers of the 21st century. They also explain where it went wrong for Europe. We had aptitude and still mostly do. But we lost the attitude. We are the global virtue-signalers who lost our appetite for cutting-edge research a long time ago.

The China of the Nineties had the attitude, but lacked the aptitude, and sent its best students to Western universities to make up for it. The US has both — aptitude and attitude — and will continue to be a dominant global power for a long time to come.

Mokyr writes: “Unless accompanied by innovations and productivity growth, growth exclusively based on a cooperative ethic will eventually peter out.” He is a critic of the self-styled intellectuals in our societies who are motivated by reputation and peer recognition. This is a swipe at his own profession, and other pseudosciences like epidemiology that gave us the Covid lockdown, based on dubious models, and statistics that fail to meet professional standards. The mathematician and author Nassim Nicolas Taleb dismissed the economics profession as a “citation ring” — very much in the spirit as Mokyr.

There was a time when the Europeans had them both — aptitude and attitude. But that was a long time ago. Gottlieb Daimler invented the motor car, probably the single most successful product of the industrial age, in 1885. It would be several decades until the car revolutionized how we live. Modern suburbia would have been unthinkable without it. For the German economy in particular, the car was an invention that kept on giving — until this decade. We have reached the end of this long cycle of innovation. Germany still has a big car industry, but it is no longer making a lot of money. The future of cars is electric, digital and, in particular, Chinese.

The computer is the only other single product that has ever managed to rival the car — and surpass it — in terms of its economic impact. But that, too, took a long time. The computer did not have any discernible impact on productivity growth until quite recently. We are already seeing the impact of AI in some pockets of the labor market. AI is bad news if you are a wedding photographer, a freelance writer, or a legal assistant. It will end up killing millions of mid-tech jobs while creating new jobs in other areas.

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When China embarked on modernization under Deng Xiaoping in the Eighties, it pursued a strategy of export-led economic growth and invested the proceeds into innovation and modernization. The West misunderstood China’s strategy as one moving towards Western-style democracy or capitalism. In reality, it was always about strengthening the communist system, even under Deng, and making it more successful and resilient.

China also defied another Western economic policy consensus — that governments should never pick winners. Those old enough may remember how we all laughed about the Soviet Union’s five-year plans. No one was laughing last week when the Fourth Plenary Session of the 20th Central Committee of the Chinese Communist Party agreed the 15th Five-Year Plan. It has been through these five-year plans that China managed to dethrone the German car industry, and to monopolize the technologies that would turn rare-earth minerals into magnets that are indispensable for high-powered engines. When Europeans tried picking winners, more often than not they ended up picking losers.

I remember a meeting I had in the early 2000s with the famous economist Edmund Phelps, who won the economics Nobel Prize in 2006. He gave me a daring prediction: Germany would decline relative to the rest of the world and to the rest of Europe. He said the reason was Germany’s obsession with old technologies like the car. His forecast ran counter to conventional wisdom, like those of the financial media, which upheld Germany as a virtuous role model. Phelps turned out to be right, but it took another two decades until Germany’s decline became visible to a lot more people. And it took two decades for the Nobel Prize committee to recognize the importance of innovation and disruption.

For four decades now, Europe has been falling behind the US, and now China, in all things digital. The EU has made matters worse with a string of legislation that weighs down digital technology. This deadweight began with data protection regulation from the 2010s, and stretched to more recently applied AI and crypto regulations, alongside laws to restrict the business of the US tech giants, and to force social media platforms to moderate their content. Europe still has good engineers, but we are a digital desert.

What China realized early on — and what Europeans in particular are mostly in denial of — is that there is a link between innovation and geopolitical power. It is interesting that the capitalist US and communist China both agree with Mokyr’s worldview, whereas the Left-liberal consensus in Europe and Canada is on the other side of that argument — the losing side. It is the tragedy of the political center that the radical ends of the political spectrum are more innovation-friendly.

Where can we observe that link? The US and its allies dominate advanced semiconductors; China dominates rare earths and their downstream products. Both superpowers therefore have geopolitical chokeholds on each other. Last week’s deal between Xi and Donald Trump was a ceasefire in a continuing cold war.

But by far the single most important link between innovation and geopolitical power is through the military. The geopolitical dominance of the US today had its origin in the postwar collaboration between the military and science. In the postwar era, the military became the biggest sponsor and customer of the rapid engineering developments of the electronic age. The internet was based on a communication protocol that was developed for the US military — a technology to allow data to be transmitted when communication got physically interrupted in one channel and re-routed through another. The single most important algorithm of the 20th century — the Discrete Fourier transform, without which modern digital devices would be unthinkable — had its origin in a meeting in the White House when a scientist decided he needed a faster way to identify signals from Soviet underground nuclear testing.

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Europe will clearly not regain geopolitical dominance, but there are second-best strategies. In AI, for example, most of the benefits will come from using it — not from making it. Some AI algorithms are open-source. In theory, Europe should still have a chance. In practice, it does not. Its tech regulation frustrates not only AI startups, but also broader use of AI. This is what Mokyr meant by “attitude and aptitude”. You need both to succeed. And Europe’s attitude is anti-innovation. Don’t be fooled by the EU’s overhyped Horizon Europe program, which is a pork-barrel spending program for second-rate universities. Europeans like to think of themselves as being innovative and “pro-science” — but they keep falling further behind the US and China. Europe’s priorities are to protect workers and existing industries.

Outside the EU, things look a little brighter. The largest European country most likely to succeed in this category is the UK. The UK is way ahead of the EU in AI investments. Yet after Brexit, the UK did not follow the EU in its generalized anti-tech crusade. The UK has a higher concentration of research universities that specialize in areas relevant to 21st-century science. One of the most exciting prospects is the development of a science corridor between Oxford and Cambridge. It will take a long time, but it is the right way to proceed.

The history of innovation since the 19th century holds two important lessons. The first is that the economic benefits of innovation are massive and can last for more than 100 years. The great European inventions of the 19th and early-20th centuries were not the result of luck, but of attitude and aptitude. The second lesson — the one that Germany is learning the hard way now — is that things end unless you keep innovating.

This is where the other half of this year’s Nobel Prize for economics comes in. It went to Philippe Aghion and Peter Howitt, who produced an economic model for “creative destruction”. This is a term coined by the Austrian economist Joseph Schumpeter in 1942. Creative destruction is the mechanism through which new innovation can replace old. As every gardener knows, you have to let things die to grow something new. In the world of mainstream economics, this is a controversial statement. In the world of European politics, it is total anathema.

You can still see Daimler’s contraption on display at a museum in Stuttgart. This is where you have to go to get a whiff of attitudes and aptitudes lost a long time ago. It is in museums, and Grade A-listed buildings, where Europe still excels.

On paper, this is presented as a decisive step to “cut Russia’s war revenues” and to force Moscow to the negotiating table. In practice, it is little more than the continuation of a policy that has failed time and time again. Russia has not been brought to its knees and has redirected energy flows elsewhere, while Europe has been crippled by higher prices and locked itself into a position of permanent dependence on the United States.

Before the invasion of Ukraine in 2022, Russia was the EU’s largest supplier of oil and natural gas. Since then, Russia’s share of EU oil imports has dropped from 29% to 2%, and that of gas from 48% to 12%. Yet imports have not ceased entirely. Two pipelines remain operational: the Druzhba pipeline, which still delivers oil to Hungary and Slovakia, and the TurkStream pipeline, which supplies gas to Bulgaria, Hungary, Greece and Romania. Meanwhile, the EU has rushed to replace Russian pipeline gas with much more expensive and volatile LNG, whose share of total EU gas imports has more than doubled from 20% to 50%. Nearly half of this LNG now comes from the United States, making Europe the most important market for US LNG exports.

The irony is that while the EU boasted of cutting pipeline imports from Russia, it has quietly increased its purchases of Russian LNG, most of which goes to France, Spain, the Netherlands, Belgium and Italy. This is simply a matter of economic reality: not only is Russian LNG “significantly cheaper” than American liquefied gas, but existing agreements bind European buyers to Russian supplies.

Nothing, however, illustrates the absurdity of the EU’s sanctions regime more than the fact that Europe continues to indirectly import large quantities of Russian oil. Instead of buying cheap crude directly from Russia, as it used to, it now purchases refined products from countries like India and Turkey, which import Russian crude, refine it and sell it back to Europe at a significant markup. In the first six months of 2025 alone, the EU and Turkey imported 2.4 million tonnes of petroleum products from India. Estimates suggest that two thirds of this originated from Russian crude. In effect, the EU and Turkey paid India around €1.5 billion for oil that was Russian in all but name.

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This means that Europe is now paying more for the same Russian oil than it did before, while also paying more for LNG to replace Russian pipeline gas. The bloc has thus shot itself in the foot twice: once by substituting cheap Russian pipeline gas with more expensive American (and Russian) LNG, and again by substituting direct Russian oil imports with indirect and more costly purchases from India and Turkey.

The consequences have been brutal. Europe has endured three consecutive years of industrial stagnation. Germany — once the engine of the continent — is now experiencing outright deindustrialization, with 125,000 industrial jobs lost in just the past few weeks.

Russia, meanwhile, has emerged relatively unscathed, redirecting its exports to Asia and consolidating its partnership with China. From the standpoint of Europe’s long-term interests, the obvious path would be to re-normalize economic relations with Moscow, resume cheap energy imports and work towards a negotiated end to the war. But rationality has long since disappeared from European policy. Indeed, Brussels has doubled down, announcing not only the LNG ban but also a de facto prohibition on any future use of the Nord Stream pipelines, while at the same time sabotaging any peace effort.

The justification, once again, is that sanctions will force Russia to end the war on the West’s terms. The reality is that 18 packages of sanctions have failed to achieve this goal, and the 19th will fare no better. What it will do, however, is deepen Europe’s dependence on the United States.

Indeed, the timing of the new sanctions package was not coincidental. Just days earlier, Donald Trump issued an ultimatum to Nato allies. The US, he declared, would only impose “major” new sanctions on Russia once Europeans had agreed to stop buying Russian oil. He went further, suggesting Nato impose 50-100% tariffs on China and India, both of which he accused of circumventing sanctions. He insisted such measures would weaken Russia’s “strong control” over its partners. Trump even claimed that halting Russian energy imports, combined with heavy tariffs on China, would be “of great help” in ending the conflict.

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The logic is baffling. Europe has no power to force China or India to stop buying Russian oil. Tariffs on those countries would fuel sky-high inflation and trigger counter-tariffs that would devastate European exporters, while doing little to change their purchasing behavior. Even EU diplomats privately acknowledge that Trump’s conditions are unrealistic — as Trump himself likely understands all too well. Yet his demands reveal the transactional essence of transatlantic politics today.

Trump’s ultimatum dovetails with a broader US strategy: to dominate Europe’s energy market. US Energy Secretary Chris Wright made this explicit: “You want to have secure energy suppliers that are your allies, not your foes.” Under Washington’s plan, the US could account for nearly three-quarters of Europe’s LNG imports within a few years. Indeed, ExxonMobil now expects Europe to sign multi-decade contracts of US gas as part of its pledge to buy $750 billion American energy.

Until recently, EU countries resisted such deals, fearing fossil fuel dependence and the undermining of climate goals. But the tide has shifted. Italy’s Eni recently signed a 20-year deal with Venture Global, its first long-term agreement with a US LNG producer. Edison and Germany’s Sefe have signed similar agreements. The result is structural dependence on US gas — which is not only more expensive but also has a far higher carbon footprint than Russian pipeline gas — for decades to come. This is a textbook example of geopolitical vassalage.

But it gets worse. Even as Europe is told to cut all ties with Russian energy, reports have emerged of secret talks between ExxonMobil and the Russian oil company Rosneft about resuming cooperation on the massive Sakhalin project in Russia’s Far East. If confirmed, it would mean that while Europeans are forbidden to buy cheap Russian gas and oil, American companies are quietly preparing to return. The aim, it would seem, is to buy Russian energy cheaply, resell it at a premium and push competitors like Turkey and India out of the game.

But there’s a clear flaw in this strategy. It is hard to imagine US companies actually resuming business with Russia while the war continues — especially as Washington threatens ever-tighter sanctions on Russia and its key partners, such as China and India. Indeed, Exxon’s CEO has denied the rumors. This contradiction highlights the limits of Trump’s transactional approach: the belief that he can neatly separate economics from politics, striking commercial deals with Moscow while challenging Russia’s broader security and geopolitical aims.

All the while, the push to decouple Europe from Russian energy has only strengthened the strategic partnership between Moscow and Beijing. Earlier this month, they signed a memorandum to build the Power of Siberia 2 pipeline, a $13.6-billion project stretching 2,600 kilometers through Mongolia. If confirmed, it would deliver 50 billion cubic meters of gas annually to China, providing Beijing with a reliable source of cheap energy.

For Europe, this is a disaster. Having voluntarily cut itself off from Russian energy, the continent is now committed to a future of high prices and low competitiveness. Russia, by contrast, is securing long-term markets in Asia. The new pipeline would also have implications for the US as well. Analysts predict the pipeline will cause a “structural shock” to global LNG trade, reducing China’s reliance on seaborne cargoes and undermining US ambitions for long-term contracts.

But this simply highlights why it is imperative for the US to keep its client states as reliant as possible on American fossil fuels. Seen in this light, the war has been nothing short of a triumph for the United States: guaranteeing windfall profits for its energy companies and binding Europe ever more tightly to its geopolitical priorities. Indeed, it is difficult to avoid the suspicion that this outcome was part of the rationale all along. After all, driving a permanent wedge between Europe and Russia while securing Europe as a captive market for US energy has arguably been a consistent objective of American strategy for decades.

By adopting sanctions that align with Trump’s demands, Brussels is sacrificing what remains of its autonomy. The result is a geopolitical paradox so twisted that it almost defies comprehension. European governments, trapped by their own rhetoric and by a dogmatic commitment to permanent confrontation with Moscow, have maneuvered themselves into a laughable position. They have allowed Trump to frame his demands as a perverse quid pro quo: he can present Europe’s economic self-harm and growing dependence on US energy as the price they must pay in order to accelerate their own strategic decline.

Overall, the EU’s energy policy since 2022 has been a textbook case of self-inflicted harm. By cutting itself off from cheap Russian supplies, it has handed the United States a once-in-a-generation opportunity to dominate Europe’s energy market. By embracing sanctions, which have failed to weaken Russia but have devastated European industry, Brussels has turned the continent into a geopolitical pawn. Europe’s leaders claim to be defending values and solidarity; in reality, they are presiding over a process of deindustrialization and decline, while continuing to dangerously escalate tensions with Russia. Unless there is a dramatic shift, the continent’s future will be one of stagnation and irrelevance — and, at worst, all-out war.

Yet there is at least one significant difference between Cold Wars 1.0 and 2.0. In Cold War 1.0, ideological dispute between Left and Right mapped directly onto geopolitical conflict. The First Cold War was a trial of state strength, measured in terms of military might and the extent of a country’s diplomatic influence. But it was also a competition between social systems, political visions and rival ideologies: the capitalist markets of the West versus the socialist command economies of the East. It was a trial of whether competitive, multi-party liberalism could extract more political legitimacy from its citizens when compared to communist single-party states. The trial, then, was about more than innovation in weapons systems; it also involved questions of individual rights and state legitimacy.

By contrast, the ideological fissures of today’s cold war do not clearly map onto these international rivalries. Instead, they yield a much more complex picture of political tension and geopolitical rivalry. It is true that China is still ruled by a Communist Party that won power back in 1948, but China is not the champion of Leftism in the way the USSR was. There is now a stock market in Beijing — China’s third stock market, after Shanghai and Shenzhen — and, by some reckonings, China has more billionaires than the US itself. Many of these billionaires made their fortunes after China began to enmesh its economy with the world’s. The USSR was part of Comecon, the autarkic trading regime of the Eastern bloc that kept its members sequestered from the wider world economy, but the Chinese and US economies are deeply intertwined. This much is evident from the complexity of the tariff negotiations currently underway between the two countries’ trade negotiators. 

At the same time, the two powers’ navies menace each other in the Pacific. The tensions between the countries are real, but so is their inter-dependence. Each side represents one of the two wings of global capitalism, with industrial capital concentrated in China and finance capital in the US. While Donald Trump has been vocal in accusing China of stealing American jobs and exporting poisonous fentanyl to US consumers, he and his administration have been relatively muted in their political criticism of the Chinese regime. This makes sense when one considers that China, like the US, is capitalist, and that China, by the same token, offers little ideological challenge to US global leadership. Ironically, as China’s industrial might has grown, its ideological influence has diminished. Red China was never ideologically more powerful than in the heyday of Maoism, when China was much weaker. Back then, Red China sought to inspire a global guerrilla war among the Third World’s legions of poor peasants, also claiming the allegiance of student radicals on Western campuses. (Impressed by China, the Black Panthers notoriously sold copies of Mao’s Little Red Book in order to raise money for guns.)

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Today, China’s infrastructural investments are helping those countries of the Global South convert their poor rural folk into urban city-dwellers. But former Western Maoists such as Bernard-Henri Lévy have become neo-conservatives, obsessed with bloody crusades to spread democracy to the Middle East, while China quietly consolidated its rise. 

In Cold War 1.0, Maoist ideological excess compensated for China’s relative weakness when compared to the military might of Soviet Russia. Today the roles are reversed: it is Russia that now occupies the relatively weaker position in the new Sino-Russian alliance. Predictably enough, it is Russian leader Vladimir Putin, more than Chinese leader Xi Jinping who has put most effort in trying to cultivate his own state as an alternative ideological pole in the international system. Putin rails against Western hegemony and has tried to style himself as a champion of global conservatism and family values against the spread of transnational Western liberalism. Yet Putin’s ideological reach is even more limited than that of Chairman Mao. His posture is fundamentally reactive and defensive, and his cultural defence of the Orthodox Church and “Russian world” will, by its very nature, have limited reach beyond Russia itself. While Trump is slowly tightening the noose of anti-Russian sanctions in an effort to induce a ceasefire in Ukraine, it is unsurprising that the White House has expended so little effort in criticising Putin’s vision of the crabbed, distempered Russian bailiwick. 

So where, if not between China and the US, or the US and Russia, can we find the key ideological battle line of Cold War 2.0? The line does not run so much between East and West as within the West itself: between the US and Europe. That the US is fighting an ideological cold war with Europe is most obvious in the diplomacy of Trump’s vice-president, J.D. Vance. Vance unleashed the opening volley in this ideological attack in his extraordinary speech delivered at the Munich Security Conference in February, when he calmly and methodically took apart the dismal record of European states on individual liberty and democratic rights. He criticized EU interference in the Romanian presidential elections of the previous year and even named the British anti-abortion activist Adam Smith-Connor, arrested in 2024 for silently praying outside an abortion clinic. In doing so, Vance adopted the same manner and tone that American leaders adopted when speaking out about the squashing of popular opposition in the Eastern bloc and the maltreatment of Soviet dissidents such as the physicist Andrei Sakharov or writer Aleksandr Solzhenitsyn. Following his speech, Vance met with Alternativ für Deutschland (AfD) leader Alice Weidel — a figure of obloquy for the European liberal orthodoxy. On his current holiday in the Cotswolds, Vance has not only once-again criticized the British record on free speech, he is also meeting Robert Jenrick — the dissident rival to the current Tory leader Kemi Badenoch.

When was the last time that a Chinese or Russian dissenter achieved the renown of Smith-Connor, by virtue of being cited in a speech by a major US political figure? The barbs do not come from Vance alone. Marco Rubio, Trump’s Secretary of State, has criticized the German state’s suppression of the national-populist AfD party as “tyranny in disguise”. EU leaders rallied together against Vance’s assault, with former German Chancellor Olaf Scholz defending continental restrictions on free speech. The German foreign office even took to X to criticize Rubio for interfering in Germany’s internal affairs. This is to say nothing of the years of bitter invective that have been hurled by European politicians and commentators against Trump ever since 2016. They have denounced him as a pro-Russian stooge, a demagogue and a fascist — only to downplay such remarks years later. Even Trump, who has mostly left the international ideological battles to Vance, embarrassed UK prime minister Keir Starmer on his recent private visit to Scotland. The mere mention of free speech by Trump was enough to induce gurning, tortured denials from Starmer.

There are some important differences between the former cold war and its new pan-Atlantic counterpart. When Western leaders denounced communism in the first cold war, they did so by arguing that the Soviets’ centralized economy, and appropriation of private property, was necessarily a totalitarian enterprise. Vance, by contrast, takes the Europeans to task for falling foul of their own ideals rather than realizing some larger sinister purpose. More recently, he has also accused Europe of engaging in civilizational suicide through its unwillingness to halt mass migration. The historically unprecedented inflows represent not only a divergence from the legacy of the Western civilization shared by the US and Europe, but a flouting of the elites’ democratic compact with their people. Repeatedly, voters have indicated their exasperation with the scale of mass migration; repeatedly, they have been ignored.

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Vance’s ideological confidence, as he suggested in his speech in Munich, rests on the democratic mandate won by Trump. Barracked by Vance and his colleagues, European leaders react defensively, for they are more used to bureaucratic haggling in the committee rooms of Brussels than dealing with European voters. As with any cold war, both sides recoil from full-frontal assaults: they beat hasty retreats, seek to patch up relations and make assurances of enduring alliances. But there is no mistaking the underlying political drift.

This Euro-American ideological cold war reflects the underlying political and even economic divergence between the US and Europe. Not only does the EU cling to its outdated political model — that of a supranational trade bloc designed for the technocratic regulation of globalization — it also remains ideologically and strategically committed to the economic policies of that bygone era, too. At the top of the EU’s agenda remain multilateral free trade deals, deindustrialization and expensive renewables. By contrast, the Trump administration is wielding a strong democratic mandate in its effort to re-industrialize North America behind tariff barriers that penalize Europe. It is expanding its use of fossil fuels and reducing its reliance on renewable energy.

Ideological crusades abroad, including Vance’s, always reflect domestic needs. In this case, MAGA’s desire is to assert national interests over the liberal globalism championed by the Democrats. That Vance can afford to launch an ideological cold war on Europe reflects a hard material reality: Europe simply matters much less to the US in Cold War 2.0 than it did in the first cold war. Vance can afford to be so pointed in his criticisms of the liberal, globalist EU because he knows that Europe needs America more than America needs Europe. The EU is dependent on the US for both its security and its energy, but offers little to the US in its struggle with China.

Whereas the first cold war fused ideological and geopolitical rivalry into one great bipolar stand-off, Cold War 2.0 seems like it will be characterized by financial multipolarity (as the primacy of the dollar is gradually eroded), geopolitical bipolarity (between China and the US), and ideological tripolarity, between the populist-democratic US, the liberal-technocratic EU and a conservative Russia. As an island nation formally independent of the EU, Britain — like other middle powers — might find that this new world order is rich in opportunities. It also benefits from lower tariffs than those imposed on the EU. But seizing such opportunities also requires a willingness to duck and weave in pursuit of our national interest, and, so far, our stubbornly globalist uniparty has been unwilling to show much political dexterity. For Britain, as for many other states, seizing the national interest will require internal political renewal.

Last month, broken and defeated, the European Commission sent its top diplomat, Ursula von der Leyen, to a Trump-owned Scottish golf course to sign a similarly shameful treaty. They called it a trade deal, too, to conceal how Europe gave the US President everything and received nothing but humiliation in return. Remarkably, unlike China in 1842, Europe succumbed not to defeat in battle, but to a mere few months of tariff waterboarding — a torture technique that foolish European leaders, inspired by hapless US Democrats, once dismissed as TACOS (“Trump Always Chickens Out”).

Though Europe’s poets will have nothing lyrical to recite about the humiliation that will cast a shadow for decades upon the continent, its politicians have already confessed to it. A “dark day”, in the words of François Bayrou, the French prime minister. An “admission of weakness”, cried out Michel Barnier, the European Union’s Brexit negotiator, who should know a thing or two about negotiating from a position of supreme arrogance.

The details of the EU-US trade deal are truly embarrassing for Europe. While US goods will be exported to Europe tariff-free, an across-the-board 15% tariff will be slapped on European exports to the United States, with a whopping 50% on steel and aluminum exports. And that’s only the beginning.

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Europe committed to cancelling all actual or planned cloud taxes on Big Tech, and then threw in a massive tribute to appease Donald Trump: $600 billion in fresh investments into the US economy, and $750 billion in fracked US oil and gas by the end of 2028. That is, a gargantuan check of $1.35 trillion — without including the countless billions in US-sourced weaponry that European governments are on the hook for (if they are to fulfill their Nato defense spending pledge).

By issuing her new promises, von der Leyen has overlooked the key lesson that Europe should have learned from President Trump’s first term: failing to offer Trump large sums of money may be dangerous, but making promises that cannot be delivered is infinitely worse.

Besides the fact that the European Commission cannot compel private companies to send their cash to America, there is another snag: neither the promised money nor the requisite capacity exists. German carmakers and chemical companies are, of course, already investing in the United States to bypass Trump’s tariffs, but nowhere near the promised $600 billion in the next two and a half years. Even worse, the pledge to buy $750 billion worth of US energy ($250 billion annually over three years) is pure fantasy: the EU’s annual energy expenditure falls far short of that, not to mention that US frackers do not have the capacity to sell Europe so much oil and gas even if the Europeans were willing and able to buy it.

Doesn’t Trump know this? He does, of course. Has he forgotten Jean-Claude Juncker’s broken promises? No one remembers these things as well as this US president does. You can see it in his eyes. He is loving it. It’s his golden opportunity to bludgeon a European Union that he has loathed with undiminished passion for so long. In addition to shrinking America’s trade deficit, and pocketing substantial tariff revenues in the process, Trump can’t wait for the EU to breach von der Leyen’s investment and energy pledges. Once it does, after 2028, in his last year in the White House, he will be able to extract more humiliating concessions, citing broken European promises.

Comparing the EU-US trade deal with the UK-US one signed last May, it is indisputable that Trump treated Keir Starmer with kid gloves. This had little to do with economics. Nor was he motivated by Anglophilia or his greater dislike of von der Leyen. Something larger, from his perspective, made him be kinder to Britain, even to the extent of displeasing US car manufacturers who can’t believe that it is now cheaper to import into the US a car from Britain (with no US-made parts) than a Ford or General Motors vehicle manufactured in Mexico or Canada (but with most parts made in the USA).

What could his reason be for choosing to take such heat from his own MAGA constituency on behalf of British carmakers, many of which are not actually British-owned? Simple: by setting a blanket tariff of only 10% (including for cars), 5% below the EU equivalent, while also eliminating tariffs on steel and aluminum, he has driven such a deep wedge between London and Brussels that even the staunchest Rejoiner has surely lost the will to fight on by now. Thus Trump rejoices in the thought that he has rendered Brexit, the harbinger of his own first electoral triumph, well and truly irreversible.

Before resigning itself to its own version of the Treaty of Nanjing, the EU leadership went through the same four stages of grief as Britain’s Brexit negotiators: from “We shall retaliate if they dare squeeze us” to “We may retaliate if pushed” to “No deal is better than a bad deal” to “Any deal please, we are desperate”. Now that the recriminations over the 21st-century Treaty of Nanjing are in full swing in Brussels and every European capital, two questions demand answers. What did Europe’s leaders get wrong? And what could they have done differently to avoid this humiliating deal, while preventing even greater economic pain?

For starters, European negotiators committed three unforced errors of judgement. Firstly, they assumed that the EU single market’s size mattered above all else. It doesn’t. If there is one magnitude that matters above all others, it is the size of Europe’s trade surplus vis-à-vis the United States. At more than $240 billion annually, it guarantees that a fully fledged US-EU trade war would injure Europe far more than America.

Secondly, as my colleague Wolfgang Munchau has explained, Europeans overestimated the leverage that the EU’s services deficit vis-à-vis the United States afforded Brussels. While Americans can live comfortably without Hermès scarves, French champagne, Kalamata olives and Porsches, Europeans cannot last an hour without Google, YouTube, Instagram and WhatsApp.

Thirdly, and crucially, they lulled themselves into the illusory belief that America’s goods and money markets would go into a spasm, forcing Trump to chicken out. For too long they clung to the expectation that tariffs would boost US consumer-price inflation and stock-market deflation to politically unacceptable levels. It didn’t happen for reasons that Brussels should have foreseen.

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American consumer demand is relatively more responsive (“elastic”, in economic parlance) to price hikes than both European consumer demand and the European exporters’ supply. This is why a German-made Mercedes-Benz was always cheaper in New York than in Stuttgart and why, today, a substantial portion of the tariffs is absorbed by European exporters who pass on to American consumers only a fraction of the tariff, the result being a smaller impact on US consumer-price inflation. As for America’s stock markets, they seem enthralled by their own AI investment craze, the unconscionably large tax cuts Trump gifted them, and the mitigating $300 billion annual tariff revenues that the US Treasury rakes in. Too drunk on this “irrational exuberance”, they refuse to fret over the macroeconomic ill effects of Trump’s tariff game.

But let’s suppose for a moment that the EU’s leading lights had foreseen all this. It is a fundamental principle of negotiations that if you cannot imagine leaving the room without a deal, there is no point in negotiating — you might as well be a supplicant like von der Leyen. So what could the EU have done differently, given that it lacks China’s carefully crafted bargaining weapon of rare minerals and a broad-based array of basic goods that Americans cannot live without? Here is a suggestion.

Europe’s first task would be to plan the replacement of the $240 billion in its domestic aggregate demand due to the potential loss of its trade surplus with the US. For example, the European Council could announce an aggregate productive investment programme of €600 billion annually, to be financed by net issuance of European Investment Bank bonds. The mere hint by the European Central Bank that, if needs be, it will back these EIB bonds, would be enough to keep financing costs ultra-low. All of a sudden, Europe would no longer be reliant on America to maintain aggregate demand.

In addition, the EU should drop all US-inspired tariffs and sanctions on essential Chinese green and digital tech, with a view to striking a deal with Beijing that includes coordinated fiscal expansion measures and mutual security guarantees. It should introduce a cloud tax of 5% on all digital transactions for companies with revenues exceeding €500 million annually (independently of where they are domiciled). What’s more, the EU should repeal the draconian, anti-competitive, US-imposed “anticircumvention” intellectual property laws that make it illegal to use cheaper, generic ink cartridges in your printer; that ban farmers from repairing their John Deere tractors; that stop disabled folk from making even minor adjustments to the steering of their powered wheelchairs. And finally, the EU would be wise to phase out gradually its purchases of US-sourced fracked liquefied natural gas from its energy mix, and US-made weaponry from its militaries.

The fact that such a set of responses would never even be discussed in Brussels gives us a great deal of clarity about Europe. With all the subtlety of a wrecking ball, Donald Trump has exposed how the EU is not even capable of imagining itself a sovereign power, determined as it is to remain but a vassal in an Atlanticist empire. Unlike China in 1842, the European Union has chosen permanent humiliation freely.

The idea of rearming the German military dates back to Olaf Scholz’s 2022 Zeitenwende speech — the so-called “turning point” announced in the wake of Russia’s invasion of Ukraine. Scholz promised a €100 billion fund for the military and pledged to meet Nato’s then 2% spending target. Yet that “turning point” largely failed to materialize. Two years later, the German Council on Foreign Relations bluntly concluded that little had changed.

Now, Merz is determined to deliver what Scholz only gestured towards. He has made defense and security the cornerstone of his chancellorship, launching the most ambitious rearmament campaign since the Second World War. The scale is staggering: a proposed €400 billion in defense and security investments, including a plan to raise annual defense spending to 5% of GDP — as demanded by Nato. That would represent nearly half of the federal budget — around €225 billion — a transformation with sweeping political and social consequences. On Monday, Berlin confirmed that its military spending will reach 3.5% of GDP by 2029, with the 5% target to be reached in the years to come.

To achieve this, Merz rammed through a constitutional amendment to reform the “debt brake”, a fiscal mechanism that has been enshrined in Germany’s Basic Law since 2009 and has since capped the federal structural deficit. Despite pledging during the campaign that the debt brake would remain untouched — and failing to mention his rearmament plans — Merz reversed course immediately after his election. His government exploited the final session of the outgoing parliament — even though a new Bundestag had already been elected — to approve the change. The aim was explicitly stated: to unlock vast new funding for military expansion.

On 19 May, Germany’s top-ranking military official, Inspector General Carsten Breuer, issued a directive laying out a sweeping vision for the Bundeswehr. The goal: to achieve “full operational readiness” by 2029. The list of priorities is extensive and ambitious. It includes fully equipping and digitalizing all troop formations, reviving conscription, building up anti-drone and missile defense, expanding offensive cyber and electronic warfare capabilities, and even developing space-based defense systems. Plans also include strengthening Germany’s role in Nato nuclear-sharing arrangements and enhancing the country’s long-range strike capacity — a major symbolic and strategic departure.

These changes are not just about military doctrine: they reflect a deeper transformation in Germany’s foreign policy posture. Merz has rapidly embraced a confrontational approach toward Russia, echoing some of the most hawkish voices in Nato. He has warned that Russia is “waging an aggressive hybrid war every day”, and declared that “there is a threat to us all from Russia”. Ahead of the Nato summit, he said that “we have to fear that Russia will continue the war beyond Ukraine”, implying that Russia represents a direct military threat to Europe in the near-to-medium term.

Meanwhile, just the other day, Reuters reported on a leaked Bundeswehr strategy document describing Russia as an “existential risk” and outlining Kremlin preparations for large-scale conflict with Nato “by the decade’s end”. The notion that Russia could launch a full-scale attack on Europe within a few years has become an official talking point among EU and Nato leaders — despite the fact that Moscow has neither the capacity nor strategic interest in such a move.

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Immediately upon taking office, Merz launched an active foreign policy campaign. He toured European capitals to coordinate policy toward Moscow and Kyiv. One of his first acts was to travel to Kyiv alongside the leaders of France, Britain and Poland — a symbolic show of unity with Ukraine and a signal of defiance toward Trump, who had publicly advocated for a negotiated settlement with Russia. In Berlin, Merz hosted Ukrainian President Volodymyr Zelensky and floated the delivery of German-made Taurus missiles, which have a range of more than 500 kilometers. Although domestic opposition forced him to partially retreat, he quickly pivoted to a new strategy: a €5 billion agreement to co-produce long-range missiles on Ukrainian territory using German technology.

Even more provocatively, Merz announced that Western-supplied weapons are no longer subject to range restrictions. “Ukraine can now also defend itself by attacking military positions in Russia,” he declared — effectively giving the green light for strikes deep into Russian territory with Western equipment. For the first time since 1945, Germany is now not only rearming at scale but actively encouraging direct military engagement with Russia, a nuclear-armed power. To underline this shift, Merz also confirmed that new German air defense systems would be delivered to Ukraine under a long-term, multi-year plan.

But what makes this rearmament campaign especially significant is that it is not limited to the military sphere. Merz’s vision is one of total mobilization — a “whole-of-society” approach that seeks to prepare not just the armed forces, but the entire German economy and civil infrastructure for confrontation with Russia. Media, education, industrial policy and civil defense are all being aligned to support this new war footing. Dissent — whether political, journalistic, or academic — is increasingly stigmatized as subversive or even a threat to national security. Renowned journalists and intellectuals such as Ulrike Guérot, Gabriele Krone-Schmalz and Patrik Baab have been attacked and professionally marginalized for urging diplomatic solutions to the Ukraine conflict.

This is a profound rupture. For most of the postwar period, Germany deliberately defined itself in opposition to its militaristic past. It wielded influence not through tanks or missiles, but through trade, diplomacy and its leadership within the EU. The doctrine of Zivilmacht — civilian power — was not only a policy orientation, but a moral commitment forged in the ashes of Nazi militarism. Germany saw itself as a peacekeeper, not a power-broker. The Bundeswehr was a “parliamentary army”, structured to prevent misuse by the executive and embedded in multilateral institutions designed to constrain sovereign adventurism.

Merz’s aggressive anti-Russian rhetoric — and broader strategic posture — also marks a radical departure from Germany’s postwar tradition. Even his predecessor, Olaf Scholz, though a firm supporter of Ukraine, stopped short of authorizing the use of Western-supplied weapons for strikes inside Russian territory — a red line that Merz has now crossed. Moscow has warned that such actions could trigger retaliatory strikes against NATO targets. Not long ago, this would have been unthinkable for a German chancellor.

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Indeed, throughout most of the postwar period, despite the Cold War, German policy was aimed at improving relations with Russia, then the Soviet Union — a policy known as Ostpolitik (East politics). At its core, Ostpolitik was built on the conviction that political stability and peace in Europe could be achieved through closer economic ties and sustained dialogue with the Soviet Union. Rather than confrontation, it pursued détente — a strategy of engagement grounded in the idea that interdependence would foster trust, reduce tensions and gradually open space for political reconciliation.

This was the German consensus for over 50 years — essentially up until the Russian invasion of Ukraine in 2022 — though over time the country’s political leadership, most notably Merkel, found it increasingly difficult to balance Germany’s strategic interests with its transatlantic ties, amid growing US pressure to destabilize Russia via Ukraine. In her memoir, for example, Merkel recounts her commitment to getting Ukraine to implement the Minsk agreements, which were intended to bring an end to the civil war in eastern Ukraine. As Merkel recalls, talks ultimately collapsed due to powerful forces in the US and elsewhere who were advocating for a military resolution to the conflict. This was in no small part designed to drive a wedge between Russia and Europe, and Germany in particular.

Since 2022, however, the postwar consensus started being dismantled — and is now being radically overturned. But how did we go, in the span of just a few years, from Ostpolitik to Merz vowing to do “everything” to ensure the Nord Stream pipeline never reopens, embarking on a massive rearmament program and even flippantly talking about helping Ukraine bomb Russia? Is this simply a “natural” reaction to Russia’s invasion and the new post-Ukraine geopolitical reality, further exacerbated by Trump’s decision to disengage from Europe?

According to some observers, this shift signals a dangerous resurgence of German nationalism and chauvinism — long simmering beneath the surface among segments of the elite, and even within broader society. For decades, this narrative goes, this latent impulse was restrained by the postwar consensus and contained within the framework of the US-led security order.

Now, with Washington increasingly preoccupied elsewhere and hinting at strategic disengagement from Europe, that restraint is eroding. According to this narrative, Germany is seizing the moment to reassert its dominance on the continent, using the vacuum left by American retrenchment to reclaim a hegemonic role — this time not through economic leverage alone, but through an assertive military posture, and doing so with a confidence that recalls far darker chapters of the 20th century.

But this interpretation is, in my view, mistaken. What we are witnessing is not a return of German nationalism, but its opposite. The policies now being implemented — from massive rearmament to the escalation of conflict with Russia — are not rooted in a cold pursuit of German national interests, but in their negation. They are the expression of a political class that has internalized the Atlantic ideology so thoroughly that it can no longer distinguish between national strategy and transatlantic loyalty.

This is the long-term consequence of how the German question was “resolved” after the Second World War: not through the restoration of sovereignty, but through the absorption of Germany into the “collective West” under US strategic guardianship. As noted, throughout most of the postwar period, German leadership attempted to balance this with the pursuit of the national interest, but in the years following the coup in Ukraine, the “American” wing of the German establishment began taking over — and with Merz, a former BlackRock representative, it is firmly in the driving seat.

Now the leadership thinks only in terms of alignment with a Western project whose priorities are often defined elsewhere. In an op-ed published yesterday in the Financial Times, for example, Merz and Macron once again reaffirmed their commitment to the transatlantic relationship and NATO — which has always entailed Europe’s strategic subordination to Washington — despite their recent rhetorical gestures toward a more autonomous European policy.

It is telling in this sense that Merz, while publicly critical of Trump, is in fact executing Trump’s vision: pressuring Germany to drastically increase defense spending, take over leadership in the Ukraine war and sever energy ties with Russia. And yet they are presented as expressions of German and European sovereignty. Contrary to Merkel’s courageous stance against the US invasion of Iraq 20 years ago, Merz has also offered a full-throated endorsement of Trump’s recent attack on Iran.

The problem today then, is not German ambition, but German submission. And the tragedy is that this submission is being dressed up as strategic autonomy — a grim parody of sovereignty in an age of ideological dependency. If German leaders once understood that peace with Russia was in Germany’s fundamental interest, today’s leaders act as if permanent conflict is a condition of responsible statecraft. That reversal is not only dangerous for Germany, but for Europe as a whole.

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The good news is that Germany’s militaristic ambitions collide with an unyielding reality: the Bundeswehr can’t find enough people to fight its wars. The military is short of 30,000 personnel, and one in four recruits quits within six months. NATO has asked Berlin to raise seven new brigades — requiring 60,000 more soldiers — a goal even Defense Minister Boris Pistorius calls unrealistic.

Pistorius says that for now conscription is “off the table”, not for lack of will but because it’s logistically impossible. “We don’t have the capacity — not in barracks, not in training,” he told Parliament. Still, he hinted that this might only be a transitory phase, subject to the military finding enough volunteers.

But the real barrier may be cultural, not logistical. A YouGov poll found that 63% of Germans aged 18-29 oppose conscription; just 19% would fight if Germany were attacked. Among those over 60 — long past draft age — support is strongest. As the researchers Chris Reiter and Will Wilkes put it: “This generational divergence is more than just an attitudinal shift. It reflects two vastly different lived realities. Postwar Germans came of age in a Cold War world with a shared civic mission: defend democracy against Soviet expansionism. In return, the state offered stable jobs, affordable housing, and a sense of national purpose.”

But this social contract has broken down, amid deteriorating social and economic prospects for young people. “For many, the call to serve in uniform doesn’t feel like patriotism — it feels like one more extraction by a system that hasn’t given back,” Reiter and Wilkes wrote.

“When you ignore our concerns and then ask us to die for the state — that’s absurd,” said influencer Simon David Dressler in a televised forum. This feeling was probably best articulated by 27-year-old German journalist Ole Nymoen in a book titled Why I Would Never Fight for My Country, in which the author addresses his generation’s widespread opposition to militarization, conscription and rearmament. That disillusionment is also reshaping politics. In recent elections, nearly half of young voters rejected establishment parties, turning to Die Linke or the AfD — not necessarily out of ideological alignment, but as a rejection of NATO’s agenda and skepticism towards the rearmament push.

Ultimately, this may be the greatest obstacle to rearmament, in Germany and beyond: that a growing number of people are beginning to realize that their real enemies are not in Moscow, but within their own political and economic elites.

The Polish presidency, though largely ceremonial, matters because it is endowed with the power to paralyze the government. But yesterday’s result is more than a domestic triumph for Nawrocki and the conservative Law and Justice (PiS) party that backed him; it has profound implications for Europe and the transatlantic alliance. To understand its significance, consider Poland’s extraordinary transformation over the past 25 years. It is arguably the most successful post-Cold War story in Europe. Just over two decades ago, when Poland joined the EU, it was a grim place that belched out people. Warsaw was a drab city dominated by a Stalinist tower. Today, Poland’s GDP is approaching $1 trillion. The living standards of its people are on a par (at least on paper) with Japan’s. Its armed forces are larger than the armies of Britain or France. Central Warsaw is clustered with skyscrapers. Poles who emigrated abroad in search of opportunity are returning home.

Those Poles who appreciate that so much of this would have been inconceivable without the EU regard the nationalist Nawrocki as a mortal threat to their country’s democratic progress and integration into the European project. When PiS was last in government, between 2015 and 2023, it tightened Poland’s already restrictive abortion laws, stacked the constitutional tribunal with loyal judges, set the country on a course of “legal exit” from Europe, and was sanctioned by Brussels. PiS was defeated in the parliamentary elections of 2023, when an ideologically kaleidoscopic coalition led by Civic Platform formed the government. That government has since been at loggerheads with the incumbent president of Poland, Andrzej Duda of PiS. A Trzaskowski victory would have cleared the way for Civic Platform to push through its agenda.

Nawrocki, inevitably, has been painted by European media as an existential danger, the figurehead of a nationalist wave sweeping the continent. These concerns are not entirely baseless — Donald Trump blessed Nawrocki in the Oval Office in early May; his Secretary of Homeland Security, Kristi Noem, traveled to Poland and endorsed him — but they are perhaps exaggerated. Nawrocki is not a fascist, nor is he an aberration. He is a product of a specific moment in Polish politics, which are riven by competing ideas of sovereignty and identity. Lord Lugard, the Governor-General of Nigeria from 1914 to 1919, once said of his restive subjects that “their very discontent is a measure of their progress”. And so it seems with Poland. Its success has bred the climate for the re-emergence of atavistic impulses — religious, cultural — that had been suppressed in its people’s pursuit of prosperity. Poles, possessing an economy that is the envy of the continent, are now squabbling over what it means to be Polish and European, Christian and modern.

The presidential race has exposed the depth of division over these questions. The loser, Trzaskowski, is a polished career politician. A member of the Civic Platform party and an Oxford alumnus, he is liberal, competent, fluent in English, and admired in Brussels. As Warsaw’s mayor, he marched in Pride parades and ordered the removal of crosses from government buildings — a choice that, while earning him the adulation of metropolitan Poles, infuriated conservatives who see their civilizational history as being inextricably bound with the Catholic Church. Their champion is Nawrocki. He was born into extreme poverty in the port city of Gdańsk. Ports, particularly in impoverished places, tend to become familiar with organized crime, and Nawrocki was exposed to this world at an early age. He sought release in athletics, became a boxer, and occasionally participated in football brawls. Working as a security guard at a hotel, he is alleged to have procured prostitutes for guests. This is not the curriculum vitae of a defender of Christian values.

But the new president is the beneficiary of a deepening resentment among those Poles who — convinced that their social values are being eroded and their sovereignty endangered by liberal elites pandering to Brussels — are willing to trade character for belligerence. This sentiment is particularly acute in places such as Radom. An hour’s train ride from Warsaw, Radom was once a proud center of Polish political life. It was the site of the adoption of the 1505 constitution, the publication of the first codified laws, and the massive protests of 1976 against the communist government. Today, Radom is an object of mockery in the cities, “a national joke”, as one filmmaker in Warsaw put it to me. Its people are dismissed as gauche and gaudy.

Such snobbery reveals more than it conceals. Yes, compared to Warsaw or Kraków, Radom is a backwater. Its buildings are decaying, and despite the presence of a university and an airport, an outsider can feel overwhelmed by ennui. But the locals feel differently. The owner of a café and bar there told me that nowhere else in Poland or Europe did she feel the same sense of community. What galls its people, then, is the knowledge that so many of their own compatriots view them as inferior beings when they see themselves as a repository of so much that is worth preserving about their country. “A lot of Poles in the cities want to be British, French, or Italian,” one Radom resident told me. “We are proud to be Polish.” He was for Nawrocki. Trzaskowski labored away in the final days of the campaign to court the nationalist vote. Rather than win them over, his flip-flopping only served to alienate his own voters.

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Nawrocki profited too from a growing frustration with Ukraine in a nation that is still intensely hostile to Moscow. Since Russia’s invasion of 2022, Poland has granted a warm welcome to more than a million Ukrainian refugees. It has given them the same privileges as Polish nationals. Three years on, there is a tincture of outrage among Poles. As one Warsaw banker complained: “Some of them drive Lamborghinis, but what are they contributing to Poland?”

Emphatically not pro-Russian, Nawrocki is, in fact, on a list of wanted men in Russia for ordering the demolition of monuments to the Red Army in Poland. But his refusal to endorse Kyiv’s admission into NATO — a departure from PiS’s position — and his pledge not to send Polish soldiers to fight in Ukraine have worked to his advantage. “One million Ukrainian men have fled Ukraine,” a student at Warsaw University told me. “Why should we go and fight for them?”

Nawrocki’s Euroscepticism, and his alignment with US interests over EU integration, are bound to impair relations with Brussels, Berlin, and Paris. His election, reinvigorating the MAGA movement following the demoralizing defeat of Trumpist candidates in Romania, Australia, and Canada, will also energize populist movements on the continent. And his cautious posture towards Ukraine could strain NATO’s eastern flank and push more responsibility onto Western European states, though Poland’s NATO and EU commitments should limit the extent of any drastic shift.

But at home, Nawrocki’s election ensures that PiS retains its stranglehold on Poland’s governance. The suggestion that it paves the way for a broader PiS victory in the next general election does ignore, though, the extent to which the duopoly of PiS and Civic Platform — the two default parties of government — has disillusioned and pushed many young Poles to the extremes. In the first round of the presidential poll, fewer than 25% of voters between the ages of 18 and 29 backed either Nawrocki or Trzaskowski. This is a steep decline from the presidential election of 2020, when almost 45% of that demographic cast their ballots for the mainstream candidates. According to one recent study, young Poles express the deepest connection to Poland, but 80% of them feel that the government is preoccupied with the concerns of the elderly at the expense of the youth.

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Nawrocki’s great luck as he takes office, though, is the unwieldy nature of the government itself. Poland’s ruling coalition is a fragile alliance of social democrats, social conservatives, economic and social liberals, and centrists. He will continue the sport of obstructing government legislation or deferring its passage indefinitely by referring it to the constitutional court.

All of this means Donald Tusk’s reform program — particularly his efforts to overhaul the judiciary — is effectively dead. His government, in power for two years, is increasingly unpopular: a recent poll by CBOS shows that just over 30% of the electorate approve of it. During the campaign, Tusk proved a liability more than an asset. For more than two decades, Tusk has been a domineering presence in the Polish political scene. Addressing the nation on Monday evening, he put on a defiant performance, promising not to “take a single step back” and calling for a vote of confidence in his government. Far from calming his critics, the call for a vote has angered his coalition partners. He has sufficient numbers in parliament to sail through, but the only way out of the gridlock for Poland is a reconciliation of sorts between Tusk and Nawrocki — or a collapse of Tusk’s government. Either way, what lies ahead for Poland is a period of political chaos. Saving civilization doesn’t come cheap.

The chances are that Trump will win this latest legal battle, just as he won the previous ones. The Supreme Court, where this legal battle may ultimately end up, has a majority of conservative justices. Six have been appointed by Republican presidents, three of them by Trump himself. The court’s most recent rulings have tilted heavily in favor of Trump. It ruled before last year’s election that Trump enjoyed immunity for actions he committed as president. It ruled in favor of the Trump administration in a case involving his decision to remove two members of an independent federal agency; on a case involving the protected status of Venezuelan migrants; and on a case that limited the scope of environmental reviews. The Supreme Court went against him in a decision to deport a Venezuelan accused of gang affiliations. This history of the court’s ruling would suggest the odds are 80:20 in favor of Trump.

But the deeper reason why I think Trump will win is that the New York court’s legal argument would set a very dangerous precedent if confirmed. It would be dangerous for Democrats too. Trump invoked the International Emergency Economic Powers Act from 1977 to justify his “Liberation Day” tariffs. That act was signed into law by Jimmy Carter. It was meant to enable a president to take emergency measures after the oil shocks of that decade.

Trump’s lawyers argued that the persistent US trade deficits constituted a national emergency that would justify the triggering of the Act. The New York court rejected this line of argument because the US has been running trade deficits since 1976. How can something be an emergency if it has been going on for that long?

The argument is sheer sophistry. In finance and economics, most crises occur due to things that have been going on for a long time. Remember subprime mortgages? They started in 1988. It took another 20 years until they triggered the global financial crisis. Or think about diseases in medicine. Life is full of emergencies whose causes started to build over long periods.

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But let’s suppose I am wrong. Trump loses the court case. Then what?

He still wins. This is because he has so many other ways of imposing tariffs. And on top of that, many more ways of achieving similar outcomes.

It already started on the weekend, when he said he would double the steel and aluminum tariffs to 50%. These tariffs come under a different heading: Section 232 of the 1962 Trade Expansion Act. I have counted five Acts that allow a president to impose tariffs — and there are probably more. Section 232 deals with national security. Joe Biden used it to impose a 100% tariff on electric cars from China. Trump’s car tariff also falls into this category.

Could the courts challenge him over Section 232? I doubt it. Historically, courts have not gone against the President over national security. Trump invoked Section 232 with the argument that the US has become dependent on imports for certain critical goods and materials, like vehicles, steel and also drugs. This is factually correct. You cannot use Section 232 to put an import on champagne and argue that you need to block its flow for national security reasons. But Trump can still do what the Europeans do: establish some food and wine standards that only domestic suppliers can fulfill.

The jargon of US trade and finance politics includes a lot of numbers, which all happen to be in the hundreds. There is also Section 301 of the 1974 US Trade Act. This is about unfair trading practices. Section 301 is triggered by an official investigation by the US Trade Representative. It is a powerful act, but slow. It follows strict procedural rules. They have to launch an investigation, hold hearings, and allow people to raise objections. But when all this is over, the President decides.

And then there is the nuclear device: Section 338 of the Smoot-Hawley Act from 1930. That is the Act that triggered the Great Depression. Smoot-Hawley allows the President to impose tariffs of up to 50% for the most quotidian of reasons: to shield American industry from foreign competition. Smoot-Hawley is surprisingly still on the statute books.

You want more numbers? There is also Section 122 of the Trade Act of 1974, which gives Trump the power to impose tariffs of 15% for up to 150 days, no questions asked. If you deep-dive into the current bill, which passed the House of Representatives by a single vote last week, you might come across Section 899. This introduces a tax on foreign investors whose countries are deemed to run tax regimes the US considers detrimental to the interests of US business.

I am going to stop here with the numbers. But the bottom line is that Trump will find a way. Only a fool would bet on Trump being stopped by the courts. It did not happen in the past. It won’t happen now.

Behind these serial misjudgments lies a deeper problem. One of the reasons why centrist, liberal democracy is in retreat is its tendency towards lawfare. The German military historian Carl von Clausewitz described war as the continuation of policy with other means. Lawfare is the continuation of policies through the courts. If you don’t win elections, you still have the courts. This is an abuse of the legal system. Democracy is not meant to work that way.

Lawfare also has a tendency to backfire. There are many examples other than Trump’s criminal trials. The UK Supreme Court’s decision to stop Boris Johnson’s prorogation of parliament in 2019 represented another campaign whose efforts did not have the intended effect. The ruling was celebrated by the Remain campaign, but it also triggered new elections that Johnson won with an unexpectedly large majority. The European Commission also commits lawfare through a procedure they call “rule of law”. It is where politicians vote to withhold payments to recalcitrant EU members. Courts in France and Romania have banned the lead candidates in presidential elections. In Germany, centrist politicians are actively discussing whether to seek a ban of the Alternative for Germany. If you can’t beat them, ban them. That’s lawfare.

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Lawfare fails for two reasons. It rallies the broader support base of those who are subjected to it — which is what happened with Trump, and with the Leave campaign during the Brexit years. But, perhaps more importantly, it has a terrible effect on those who pursue it. The lawfarers relied on the courts to do the dirty work for them. They were not sufficiently focused on defeating Trump in the elections, because the courts lurked in the background.

I see centrist-liberal complacency everywhere. Here in Europe liberals wrap themselves in the Ukrainian flag and promise that they will support Ukraine for however long it takes to defeat Russia. But for that promise to mean anything, it would have required some real sacrifice, like higher taxes, a gas and oil embargo, or comprehensively cutting off Russian banks from the Western financial system. I feel sorry for Ukraine that it has such spineless allies. The problem with liberal centrists is that they fight battles that are legal rather than political. They like something done. But they don’t like to do it themselves. They don’t fight wars themselves but prefer somebody else to fight it for them. The European centrists hate Trump in part because he ended that toxic game.

The reality is that Trump has won two elections, and he has got almost four years left to govern. The intelligent question for his opponents to ask is not how to defeat him in the courts, but how to move forward when they take over from him, and what parts of the agenda they should focus on if they were to win the mid-term elections next year. What should the US-China relationship be? Or US trade policy after 2029? Do you really want manufacturing to come back? What kind of manufacturing?

The reason why electorates are disaffected with incumbents is that many voters are not partaking in the fast lane of the 21st-century economy. It would be a massive job trying to fix this. It would mean reconnecting the average voter with the 21st-century economy. Trump managed to connect with the average voter better than his Democratic opponent, but in the end I don’t think he will deliver for them. The Trump presidency is more likely than not to end in disappointment. The sole purpose of the tariffs is to pay for the tax cuts that will benefit mostly the rich. If you want to defeat Trump, forget the courts. Start solving the actual problem.