Tag Archive for: Europe

How Europe can pay for rearmament

Europe urgently needs to rearm. Russia’s invasion of Ukraine, and the broader threat that President Vladimir Putin’s regime poses to Europe, requires nothing less. US President Donald Trump’s administration has also now made clear that neither Ukraine nor the United States’ NATO allies can count on continued US support. Perhaps this particularly brutal wake-up call will finally jolt European governments out of their complacency.

If so, the big question is how to finance the requisite increase in military investment at a time when Europe’s economies are weak, public finances are stretched and many voters are loath to accept cuts to other government spending. The scale of the challenge is indeed daunting. Russia’s economy is on a war footing, its army is battle-hardened, and it has a huge stockpile of nuclear weapons. Even though Europe’s economy dwarfs Russia’s, a recent report by the International Institute for Strategic Studies estimates that, after adjusting for purchasing power, Russia’s military expenditure last year (US$462 billion) was higher than Europe’s (US$457 billion).

Europe’s big powers have struggled to meet NATO’s previously agreed peacetime target of spending at least 2 percent of GDP on defence. France and Germany managed barely more than that last year, while Britain reached 2.3 percent of GDP. These figures are woefully inadequate for an age when war has returned to the continent and Europe must provide for its own security.

Trump wants NATO’s European members to raise their defence spending to 5 percent of GDP, while NATO Secretary General Mark Rutte acknowledges the need for ‘considerably more than 3 percent.’ Poland has already upped its military spending to over 4 percent of GDP, with the aim of reaching 5 percent, and other frontline states such as Estonia and Lithuania are not far behind it. Now the rest of Europe must follow suit.

But how should they finance the effort? With European economies stagnant and many Europeans struggling, governments are not keen to raise taxes or slash welfare spending. While such measures may ultimately be necessary nonetheless, the politically obvious solution for now is to borrow. This would make economic sense, too, since higher defence spending is, in fact, an investment in Europe’s future.

True, high government debts, EU fiscal rules, and domestic political constraints make increased borrowing tricky for many countries. But there are at least three options for mitigating these factors. The first is to exclude investment in defence from the bloc’s fiscal rules, which broadly limit government borrowing to 3 percent of GDP. Last year, the European Commission launched an ‘excessive deficit procedure’ against Poland, which rightly argued that its increased borrowing was necessary to protect the country—and the rest of Europe—from the heightened Russian threat.

Fortunately, European Commission President Ursula von der Leyen seems to have come around to the Polish position. She is proposing to activate the Stability and Growth Pact’s escape clause (which allows higher borrowing during crises) to permit increased defence investment. While Germany and other fiscally frugal countries have previously objected to granting such additional flexibility, that may change after the German elections on 23 February, given the country’s belated awareness of its vulnerability.

Since Germany itself has low public debt and a small budget deficit, EU fiscal rules would not prevent it from borrowing more to upgrade its feeble defences. But it is shackled by its own constitutional debt brake, which then-chancellor Angela Merkel introduced in 2009, and which the country’s powerful constitutional court aggressively enforces. Again, though, there could be greater openness to amending this measure after the election.

Fiscal rules are not the only constraint, however; so, too, are bond markets. France’s public debt already exceeds 110 percent of GDP, and its minority government has struggled to pass a budget that would trim its bulging budget deficit (6.1 percent of GDP). The country’s precarious political situation has further increased the premium that it must pay relative to German debt. Indeed, the interest rate on French debt briefly exceeded that of Greece last year.

A second option, then, is for European governments to borrow collectively to finance a one-off investment in defence capacity, as French President Emmanuel Macron has suggested. There is a precedent for this: the European Union’s €750 billion (US$782 billion) Covid-19 recovery fund. Another round of joint borrowing to the tune of €500 billion (3 percent of EU GDP) could amplify member states’ defence spending, help to rationalise European defence procurement, and potentially bolster European defence firms.

The hitch is that Hungarian Prime Minister Viktor Orban is openly pro-Putin, while four other EU countries (Austria, Ireland, Cyprus and Malta) have maintained their official neutrality vis-a-vis Russia. Moreover, fiscally frugal northern European countries have hitherto been reluctant to sanction further EU borrowing.

One potential workaround is for a coalition of willing governments to set up a special purpose vehicle separate from the EU, which could issue joint bonds backed by guarantees from participating governments. This would not only bypass recalcitrant EU members; it would also allow for participation by non-EU defence partners such as Norway and Britain. The relatively new British Labour government might find this especially attractive, given its own domestic fiscal constraints.

Finally, the third option is to expand the scope of European Investment Bank lending. While the EIB can already finance dual-use (civilian/military) projects, such as those producing drones and satellites, 19 EU governments recently suggested that it should also be permitted to finance wholly military spending, such as investments in tank and ammunition manufacturing.

However it is financed, Europe needs to rearm now. Upping defence spending to avert Ukraine’s defeat and deter broader Russian aggression is much less costly than fighting an all-out war. Otherwise, as Rutte warns, Europeans will need either to learn Russian or to move to New Zealand.

Neither Atlanticist nor isolationist: recognise Trump as an imperial nationalist

Like people in other regions, Europeans face the challenge of discerning what motives underlie US President Donald Trump’s verbal provocations. After all, what Trump really wants is often unclear, which makes it difficult to devise a strategically effective response.

Traditionally, Europeans have interpreted US foreign policy through a binary lens: either a US administration is Atlanticist, in which case all is well (for the most part); or it is isolationist, which spells trouble. But Trump fits neither category.

He is certainly no Atlanticist, because he is convinced that NATO offers insufficient benefits for what it costs the United States, and that Europeans are all free riders. But he is hardly the first US leader to make this criticism. US complaints about European free-riding date to at least to the early 1950s, when NATO was just taking shape. The difference between Trump and his predecessors is that he puts a much higher price tag on protection by the United States and views it as something that Europeans do not really deserve.

But nor is Trump an isolationist, though many commentators describe him in these terms. Trump does not think only in crude transactional terms. He believes that the US is owed all the perks of hegemony, but with none of the costs. Rather than an isolationist, he is an imperial nationalist, like many 19th-century US leaders. Even his preferred policy instruments for ushering in a golden age—tariffs and territorial expansion—recall that era.

For Europeans, both seem absurd today. But from a US point of view, they have a historical resonance. The US’s war for independence began with a conflict over tariffs, which have since been seen as an instrument of sovereignty. The US is one of the few countries in the world whose constitution explicitly mentions trade. Even if tariffs tend to harm domestic consumers, they serve a political function.

This is reflected in Trump’s proposal to create a new External Revenue Service which would centralise tariff administration and serve as a depository for tariff revenues. With such an agency, Trump would have the means to redistribute revenues among states and political clients as he wished. He pursued a similar strategy during his first term when he established a fund within the Department of Agriculture to compensate those harmed by China’s retaliatory measures against US soybean exporters.

But the most important objective, of course, is to use tariffs to exert pressure on partners that are particularly dependent on the US market: Mexico, Canada and Europe. In the case of Canada and Greenland (an autonomous Danish territory), Trump has also expressed territorial ambitions, wishing to ‘get Greenland’ and make Canada the ‘51st state.’ Commercial pressure is thus a means of achieving territorial expansion, just as it was for the US in the 19th century.

In pining for a US geostrategic fortress stretching from Greenland to Mexico, Trump is unwittingly echoing a US State Department document from the middle of the 19th century which stated that the acquisition of Greenland would ‘flank British North America for thousands of miles on the north and west, and greatly increase her inducements, peacefully and cheerfully, to become a part of the American Union.’

Europe has understandably been left in a state of shock by Trump’s decidedly non-Atlanticist, non-isolationist geopolitical project. What can be done? Should we simply pray that it will not happen? That, more or less, has been the response from the European Union’s new high representative for foreign affairs and security policy, Kaja Kallas. In one of her first public statements, she said little about the threat from the US, because she is primarily concerned with just one issue: maintaining transatlantic solidarity to confront Russia in Ukraine. But laudable though this objective may be, it takes two to tango.

Meanwhile, no European official has bothered to mention the EU’s Anti-Coercion Instrument, which permits retaliatory tariffs to be imposed against any state that would use trade restrictions for geopolitical purposes. If Trump decides to intensify his pressure on Denmark through high tariffs, the EU will have no choice but to trigger this mechanism. To do otherwise would be to confirm—and exacerbate—its own geopolitical weakness.

For the same reason, the Danish government is wrong to play the appeasement card. Obviously, the balance of power is not in its favour. But by making no secret of its fear, it is inviting Trump to be even more aggressive.

While it does not make sense for Europe to deploy troops to Greenland—which would either look ridiculous or create the possibility of a war with the US—nor does it make sense to grovel. Whatever happens, Russia is the biggest winner for now. While Europeans hem and haw, no one should be surprised if the White House and the Kremlin negotiate the future of Ukraine behind closed doors.

Europe needs shared defence capabilities

Following Donald Trump’s victory in the US presidential election, Europe has recognised the need to strengthen its security and bolster its economic resilience. European defence industry leaders have called for more investment in the sector, and defence ministries are spending more on science and technology to ensure their countries’ readiness for the wars of today and tomorrow.

But it is not enough for each country to act alone. The European Union and Britain must approach technological innovation with the goal of building shared defence capabilities. Recent moves in this direction are promising: the German defence company Rheinmetall said it would open a new factory in Britain in 2027, as part of a landmark defence agreement between the two countries. Britain’s BAE Systems, Italy’s Leonardo and Japan’s Mitsubishi Heavy Industries are collaborating to develop a next-generation fighter aircraft. Germany’s Helsing, which specialises in AI-based defence software, is working closely with Swedish defence giant Saab and plans to expanded its presence in Britain.

Focusing on collective, rather than national, interests would enable large economies of scale. Each country could build on its comparative advantages, both in technological innovation and military capabilities, and thus strengthen European resilience for decades to come. This would also ensure that Europe serves as a strong partner to the US, contributing its unique defence expertise and industrial base.

Advanced European technological capabilities also form the foundation of economic prosperity, as reflected in Mario Draghi’s recent report on the future of European competitiveness and the European Commission’s policy agenda. But national policies continue to focus on technological sovereignty, with the goal of strengthening and protecting domestic industry, at the expense of sharing resources and information with allies.

This is the wrong approach. The proliferation of critical technologies means that even the strongest European economies cannot build an advantage on their own. Moreover, each country going it alone would stifle growth opportunities by inadvertently limiting exports and reducing market size below what is economically efficient or desirable.

Gaining a technological edge requires building European alliances that promote and protect shared capabilities. This collective statecraft would allow smaller economies such as Denmark, Norway and Estonia, which are home to innovative entrepreneurs working in quantum, space, and cyber technologies, to contribute to Europe’s sovereignty. These countries are too small to support a broad-based tech sector; working more closely with European allies would help them build their industrial base and boost domestic economic growth.

The idea is far from new. During World War II, the British shared extraordinary advances in radar with the United States under the auspices of the Tizard Mission. Today, NATO allies are developing drones with Ukraine. But to adopt a more consistent approach to pursuing collective sovereignty over tech outside of wartime, European governments must consider two factors: dependency and vulnerability.

Becoming a leader in critical technologies requires mutual dependence in terms of expertise, geographic advantage, and cumulative production. For example, quantum-computing systems rely on expertise in a wide range of areas, from superconducting materials to cryogenic engineering, which is usually spread across countries, highlighting the importance of alliances. Other innovations, such as space-launch technology, depend largely on geography: Norway’s Andoya spaceport, inside the Arctic Circle, will be essential for European space sovereignty. Lastly, some countries, after years of investment, have a cumulative advantage in production, such as Taiwan with semiconductors. Here, well-established manufacturing operations in Germany and Britain could be complementary.

Equally important is the question of vulnerability, which can stem from dependence. The war in Ukraine, for example, has highlighted Europe’s vulnerability to Russia’s control over natural gas (as well as supply-chain vulnerabilities in drone components). As the energy transition accelerates, the region will need to ensure that it can access critical material inputs and technology—which requires a shared effort.

Multilateral institutions can facilitate such collaboration. For example, the AUKUS security alliance, established in 2021 by Australia, Britain and the US, is committed to delivering advanced capabilities and ensuring license-free defence trade. Likewise, NATO should enable the sharing of non-military technologies.

Fortunately, some progress is already being made on this front. Last year, NATO established an innovation fund to invest in technologies that advance security goals. More recently, the European Commission launched a Trusted Investors Network to remove barriers to co-investing in breakthrough technologies with the European Innovation Council Fund.

At its core, collective economic statecraft means recognising that one country might be better served by supporting industry in another. Only by developing a collaborative framework that enables capital from across Europe (and the US) to be channeled to the most promising ventures can Europe gain the technological advantages that will help it meet important military challenges.

Such bold action would resolve a fundamental tension that has beset discussions of national security and economic competitiveness in Europe. Shifting the conversation from defending the homeland or strengthening its competitiveness to a discussion of how to advance collective interests would lead to measures that both promote and protect Europe’s sovereignty and economy. But first, each European country must be clear about its technological, geographic and production advantages and about how it can best contribute to collective peace and prosperity.

Has Angela Merkel no shame?

When Angela Merkel left the German chancellorship in December 2021, after 16 years in power, she had a credible claim to being one of the greatest politicians of the 21st century (so far). Now, after three years of deafening silence, and with her legacy in shambles, she is promoting her forthcoming political memoir. Her silence was more persuasive.

She gave her first interview to the German weekly Der Spiegel, defending major policies that helped to shape Germany and Europe as we know them today. Among these were her appeasement of Russia, which adhered to the Cold War principle of ‘change through trade’ (Wandel durch Handel); her welcoming of more than one million refugees (mostly from Syria and the Middle East) in 2015; and the phaseout of Germany’s nuclear power plants.

A fourth issue concerns not a policy but the lack of one. Owing to Merkel’s failure to do anything noticeable to adapt the German economy to this century’s technological challenges, the country remains under-digitalised, with embarrassingly poor internet access, an absurdly overgrown bureaucracy, governing institutions that still use fax machines and once-dominant companies that can no longer compete with their American and Asian counterparts. German highways and bridges are crumbling, trains regularly run late and major infrastructure projects (like Berlin’s rail station and airport) take two or three times longer than they would in Poland or even Romania.

Where once Germans heaped scorn on Poles for supposedly being foolish and incompetent, now the tables have turned. Visit Germany nowadays and you may find that you cannot even pay for breakfast with your credit card. You will have to run to an ATM, but you may find that it is broken or does not accept Visa or Mastercard (as is the case two-thirds of the time). And don’t even think about connecting to wi-fi. You will find better access (and a more dynamic information-technology sector) in Belarus—a Russian vassal state.

Moreover, Merkel did nothing during her 16 years in power to prod the industries that Germany prides itself on—chemicals, pharmaceuticals, internal-combustion vehicles—to adapt to the 21st century, and now it shows. The German army, meanwhile, is regularly an object of ridicule in the European press.

If Germans prefer to use fax machines and avoid the internet, that is their business. Unfortunately, though, their government’s decisions affect all of Europe. Merkel’s moral argument for providing aid and shelter to refugees in 2015 is uncontroversial. But surely she should have known that immigration on such a massive scale would produce a populist backlash, not only in Germany but throughout Europe. Merkel made a show of standing up for liberal democratic values, but her policy yielded an assault on them. The result was weaker liberal democracy and less immigration.

Similarly, by stubbornly insisting on the Nord Stream and Nord Stream 2 pipeline projects, Merkel and other German leaders empowered a dangerous dictator who had revisionist designs on eastern Europe. And by blocking NATO from offering a ‘membership action plan’ to Ukraine and Georgia at the 2008 Bucharest summit, Germany effectively invited Russia to invade. Anyone with an elementary knowledge of Russia’s foreign policy knew that the Kremlin would exploit the resulting uncertainty.

In her Spiegel interview, Merkel blames others for this litany of failures. She says she was not the only one against a NATO accession process for Ukraine and Georgia; but is that supposed to excuse her? Europeans took their cues from Germany in those days, and Merkel’s voice mattered more than others—as she well knows.

Similarly, Merkel is still repeating the canard that Nord Stream was a purely economic project, even though it obviously was not. In defending appeasement of Russia, she argues that Poland and Ukraine did not mind having gas transit through their territories as long as they profited from it. But the controversy around Nord Stream was that by circumventing Poland and Ukraine, it diminished whatever influence they had vis-a-vis Moscow. Merkel decided that cheaper gas was more important than Polish or Ukrainian security. In the end, her approach brought an energy crisis and was one of the causes of a new land war on the European continent. The result was no cheap energy and no security.

Merkel’s decision, following the 2011 Fukushima disaster in Japan, to phase out Germany’s nuclear power plants also empowered Russia by making the German economy even more dependent on Russian hydrocarbons. Again, such choices could still be defensible if we lived in blissful ignorance of Vladimir Putin’s true character. But after 2008, and especially after 2014, there was no longer any question about who he was and what he intended to do.

Merkel herself was repeatedly warned. As early as 2006, Radek Sikorski, then Poland’s defence minister, was comparing the Nord Stream project to the Molotov-Ribbentrop Pact (the secret 1939 agreement between Hitler and Stalin not to attack each other). Five years later, he was still beating the same drum, warning that Poland and Europe had more to fear from German passivity than from German power.

Merkel ignored these arguments. During her long tenure, Germany tried to trade Eastern European security for cheap energy, abandoned an existing renewable-energy source, and gave nativist populists a potent campaign issue. She made Europe less safe from threats both foreign and domestic. Today, with Germany mired in a leadership crisis and buffeted by new global headwinds, Merkel continues to tell herself that she did everything right.

From the bookshelf: ‘Who Will Defend Europe?’

Despite frequent US calls for NATO to lift defence spending, most of its European members kept pocketing a peace dividend in recent years by running down their armed forces and defence industries. They imagined that war would never return to Europe and that in any event they could rely on the US to defend them.

Both assumptions were illusory, as Keir Giles argues in a new book, Who Will Defend Europe? Giles is a senior fellow at Chatham House and director of the Conflict Studies Research Centre. He has been an active and prescient analyst of Russia, especially since the invasion of Ukraine, notably in his books Moscow Rules and Russia’s War on Everybody.

As Giles notes, many commentators argue that Russia can no longer be considered a major security threat. It has not been able to achieve its ambitious goal of conquering Ukraine despite its size advantage and has lost enormous numbers of troops and military equipment.

But this viewpoint is shortsighted, writes Giles. Russia has built back its land forces, offsetting losses. The rest of Russia’s military—its air force, navy and nuclear forces—is relatively unscathed. When hostilities come to a halt, Russia will be able to quickly rebuild its military for more adventurism. Indeed, according to off-the-record interviews with European defence and intelligence chiefs that Giles conducted, Russia will be preparing for its next attack on a European NATO member country in the coming few years.

The enormous challenge of countering Russia beyond the traditional battlefield was also highlighted by British MI5 Director General Ken McCallum in a recent speech, when he said: ‘While the Russian military grinds away on the battlefield, at horrendous human cost, we’re also seeing Putin’s henchmen seeking to strike elsewhere, in the misguided hope of weakening Western resolve.’ He said Russia ‘is on a sustained mission to generate mayhem on British and European streets: we’ve seen arson, sabotage and more.’

Writing before the 5 November presidential election, Giles says that, regardless of the results, the US will likely be less committed to defending NATO’s European members. Through the ongoing conflict in the Middle East, it is apparent that the US is more committed to defending Israel than Ukraine, with fewer restrictions being placed on Israel’s use of American military equipment. US military leaders in the Indo-Pacific are also competing with NATO for resources as they consider the possibility of a conflict with China in 2027, widely deemed to be a greater priority than Europe.

Ukraine is a shield holding back Russian aggression from Europe, writes Giles, but European reactions are quite diverse. Frontline states such as Poland and Finland are taking the Russian challenge seriously and ramping up defence expenditure. Germany has announced a major increase in defence spending, but it will take a long time for this to translate into improved capabilities. Moreover, while most European NATO countries are now aiming to achieve the organisation’s defence spending target of 2 percent of GDP, it seems that much higher contributions will be necessary.

Giles is rather despondent about the state of the military in Britain, his home country, where it seems to be in a shambles. While the new Labour government’s strategic defence review is welcome, conducting it postpones the timing of reform of the military by one year, and the government has announced that it will not be increasing defence spending.

Another area of concern is Giles’ perception that, because of their soft and comfortable lifestyle, Britons may not come together to defend its nation and values, as it did during World War II. While the same concern would apply to some other European countries, the need to defend your country and values is a relatively easy sell in Sweden, Finland and Poland.

Giles also laments the reluctance of some leaders to speak openly about the gravity of Europe’s security situation. Most European economic and political systems have not woken up to the threat, or if they have, they are not doing anything about it. European populations are mostly unaware of threats to their countries’ security.

Overall, Who Will Defend Europe? is a well-written book, offering detailed insights and perspectives on the gravity of Europe’s security situation, which will have spillover effects worldwide.

How Europe should woo Trump

Donald Trump’s re-election as US president is a shock to Europe, which is woefully unprepared. His promised protectionism threatens the European Union’s struggling export-led economies, and his transactional attitude toward NATO endangers Europe’s already feeble security. Ukraine could soon be sacrificed to Russia, and by emboldening nationalist fellow-travelers such as Hungarian Prime Minister Viktor Orban, Trump may cause EU unity to be further undermined from within.

Shell-shocked Europeans will be tempted to hunker down and hope that Trump does not make good on his most extreme policies: slapping blanket tariffs on European exports, abandoning Ukraine and quitting NATO. But this would be a catastrophic mistake. Europeans must swallow their pride and try to win Trump over.

There is some hope in Trump being unpredictable, inconsistent and susceptible to flattery. He often stakes out aggressive positions as a negotiating strategy, the goal of which is to clinch a deal that he can trumpet as a victory. He craves admiration and respect, and he hates looking weak. Europe’s strategy should capitalise on these features of his personality.

Three points stand out. First, personal diplomacy is paramount. The worst way to engage with Trump is to rely on bureaucratic, policy-oriented, rules-focused EU institutions. Instead, European leaders need to establish positive personal relations with him—just as Japanese Prime Minister Shinzo Abe did just after Trump won the 2016 presidential election.

The ideal person for this task is Italy’s right-wing nationalist prime minister, Giorgia Meloni. She shares Trump’s hostility to illegal immigration and his professed conservatism on social issues. Already a star in the eyes of American conservatives, she has also been lionised by Elon Musk, who has aligned himself fully with Trump.

But Meloni has also acted pragmatically as prime minister, advancing Italian interests through cooperation within EU circles, rather than in opposition to them. She has also been hostile to Russian President Vladimir Putin and supportive of Ukraine. And with her party enjoying strong backing from small businesses, she is vocal in defending Italian export interests. Meloni’s mission should be to build a rapport with Trump and emphasise the common ground they share.

Second, the EU should give Trump immediate policy wins on trade and defense. Meloni should come bearing gifts, not least a plan to boost US exports to the EU. Trump views the EU’s large trade surplus with the US as unfair, and his proposed solution is to impose sweeping (10 percent or even 20 percent) tariffs on EU exports.

Since the US is the EU’s largest export market—goods exports to the US reached €500 billion in 2023, one-fifth of the bloc’s total—the sluggish European economy is vulnerable to US protectionism. Moreover, since US goods exports to the EU are only €350 billion, and since Trump does not need to worry about re-election, EU retaliation is unlikely to be effective. The best option, therefore, is to try to forestall Trump’s tariffs by unilaterally opening EU markets to US exports.

The other big policy win that Europeans should hand Trump is a commitment by European members of NATO to raise defense spending to 2.5 percent of GDP next year, and to 3 percent by the end of Trump’s four-year term. Doing so is desirable in any case. Europe is vulnerable to Russian aggression because it cannot defend itself. That is why far-sighted countries, notably Poland, have already hiked up defense spending since the invasion of Ukraine in 2022.

Boosting European defense spending would be a hedge against Trump’s suggestion that he will not help defend European countries that don’t spend enough on defense, or that he would withdraw the US from NATO altogether. With luck, a big move by European countries would avoid such a calamity.

Given how little Italy spends on defense, Meloni may not be the ideal person to deliver such a message. The better spokesperson on this issue is NATO’s new secretary-general, Mark Rutte, who maintained good relations with Trump during his first term, when Rutte was the centre-right prime minister of the Netherlands.

Finally, Europeans must appeal to Trump’s vanity to try to save Ukraine. President Joe Biden’s administration and its European allies have sought to fast-track aid to Ukraine to mitigate the threat of a Trump victory, and European countries ought to continue supporting Ukraine in any case. But Ukraine’s faltering war effort will obviously suffer without US aid. Trump’s re-election will have set off alarm bells across Ukraine. He has talked of cutting off US support and ending the war within 24 hours, implying that he will force Ukraine to abandon the territory it has lost and remain vulnerable to future Russian aggression.

But Trump is obsessed with looking strong, not least in the eyes of other strongmen such as Putin and Chinese President Xi Jinping. So, Meloni should make the case that abandoning Ukraine would make him look weak. It would be better for him to stand up to Putin and bring the war to an end in a fairer way, thus solidifying his status as the dealmaker-in-chief. Useful allies here could include Mike Pompeo, Trump’s former secretary of state and potentially his new defense secretary, who also advocates a tough line in support of Ukraine.

It is easy to find reasons why this strategy might fail. Trump is mercurial, Meloni might change her tune with respect to the EU and Ukraine now that he is in power, and European governments are divided and generally quite timid. EU institutions are weak but also protective of their negotiating privileges. Orban may urge Trump to pursue a different strategy. Even so, Europe needs to try, because the alternatives are terrifying.

Austria’s far right did not win

Commentators have been unanimous in describing Sunday’s legislative election in Austria as a victory for the far-right Freedom Party (FPO), and pressure is now mounting on the progressive president, Alexander van der Bellen, to give the populists a chance to form a government. But this narrative misconstrues the electoral outcome and risks handing anti-democratic forces an unearned windfall.

To be sure, the FPO had a strong showing, winning more than 1.3 million votes (29.2 percent). But this is not unprecedented. In four of the last five elections, far-right parties attracted more than a million supporters, reflecting the fact that a significant minority of mostly rural Austrians (representing roughly one quarter of the electorate) has consistently supported uber-conservative political projects. Austria’s constitutional system, with its considerable regional decentralisation, has always been able to manage this unfortunate reality.

The narrative of a far-right victory seems to rest on the fact that the FPO won a plurality of votes among the five factions that gained seats in the parliament. In Vienna, the capital and the most populous of Austria’s nine states, the Social Democrats won decisively, increasing their share of the vote. And, nationally, the Christian Democratic Austrian People’s Party finished second, with 26.5 percent of the popular vote. Nonetheless, supporters of the far right in Austria have seized on global headlines to claim that any outcome other than a cabinet headed by the FPO’s pro-Russian leader, Herbert Kickl, would amount to a betrayal of democratic values.

This is not the first time we have heard such arguments following a plurality victory within a proportional multiparty system. Last year, Poland’s right-wing president spent weeks delaying the transfer of power from the populist Law and Justice (PiS) party to the democratic opposition based on an analogous rationale. And soon thereafter, commentators raised alarms about the supposed populist mandate in the Netherlands, where Geert Wilders’s far-right Party for Freedom became the largest of the 15 parliamentary factions, winning 23.5 percent of the popular vote.

In none of these countries do constitutional provisions require entrusting a plurality winner with the task of forming the government. Such a rule would be absurd. Far from magically conferring a popular mandate, winning a plurality is mainly a function of how fragmented a country’s political party system is.

In this Austrian election, for example, 9.1 percent of the vote went to the New Austria and Liberal Forum (NEOS), which gained two additional seats. Formed in 2012, NEOS wants to revitalise the economy and strengthen support for Ukraine in the face of Russian aggression. Had it not been around, the People’s Party probably would have overtaken the FPO in the elusive quest for a plurality.

Given this, should we then conclude that the preference of more than 400,000 Austrians for a more energetic liberal formation somehow hands the mandate to govern to the far right? What about the nearly one million Austrians who voted for the Social Democrats? Under the plurality mandate theory, they also supported the far-right mandate by not holding their noses and strategically voting for the centre right.

In the face of a consistent populist threat, democratic forces should not just roll over. They should innovate. Sometimes, the result will not be a unified republican front, but rather a loose assemblage of democratic factions that appeal to various segments of the electorate.

This is what happened last year in Poland. The authoritarian PiS was defeated by leftist, liberal, and Christian Democratic blocs that coordinated mutually friendly campaigns and, after belatedly receiving the presidential commission, smoothly formed a cabinet. The baseless fixation on a plurality mandate discourages such successful democratic experiments by ignoring the legitimacy of other parties’ shares of support.

The typical response to such arguments is rooted in tradition. In Austria, the party with the strongest showing has almost always been offered an opportunity to form the government and hold the federal chancellorship. But the populists are themselves providing reasons to be treated differently. From Poland and the Netherlands to Austria, populists consistently frame elections as a stark choice between an indistinguishable assortment of corrupt mainstream parties and themselves. In one of the FPO’s pre-election ads, a stern-looking voter stands at a crossroads with a rightward-pointing sign featuring Kickl and a leftward-pointing sign lumping together photos of the four mainstream party leaders.

Van der Bellen should take the populist message seriously and decline to offer Kickl a chance to form the government. If the FPO truly represents a vision of Austria distinct from that of all other parties, then voters have made their wishes clear. The FPO’s vision was overwhelmingly rejected. Despite significant economic and social challenges, 70 percent of Austrians chose to entrust their country’s governance to mainstream democratic parties. Their voices should be heard.

The US election will overturn Europe’s strategic status quo

With the US election just two months away, European decision-makers have gone from grappling with Trumpian nightmare scenarios—new trade wars, abandoning Ukraine and withdrawing from NATO—to experiencing an emotion they had almost forgotten: hope.

Vice President Kamala Harris’s ascent to the top of the Democratic ticket has eliminated Donald Trump’s polling lead and allowed Europeans to contemplate alternatives to their worst-case scenario. Yet, even if Harris wins, it would be foolish to expect complete continuity with Joe Biden’s administration. Europe remains unprepared for what’s coming.

While Trump and JD Vance’s talk of ending US support for Ukraine has set off alarms in European capitals, a Harris administration’s Ukraine strategy would probably depart from the status quo, too. As the war grinds on, US officials have lost confidence that Ukraine will capture and hold enough ground to break the current deadlock. Despite the Ukrainians’ offensive into Russia’s Kursk region, they are still losing ground in Donetsk. Recovering the territory they have lost since February 2022 becomes more unlikely by the day.

Thus, a Harris administration would have to look for ways to strengthen Ukraine’s hand in the short term in order to pivot toward a settlement. Knowing better than anyone that their situation is bleak, the Ukrainians have been looking for a way out of the stalemate. Though they have launched their Kursk gambit, Ukrainian President Volodymyr Zelensky said in July that he wants the ‘hot stage’ of the war to end this year. Privately, Ukrainian leaders may be hoping that the United States will push them to the negotiating table, as that would provide the political cover they need to change course. Such discussions are already well underway in Washington.

This might come as a shock to those Europeans, including the next high representative for foreign affairs for the European Union, who still talk about supporting Ukraine for ‘as long as it takes’, and whose rhetoric has hardly changed since 24 February 2022. Whatever happens, the challenge for Europeans is to ensure that the war does not result in a ‘peace’ on Russian terms: a demilitarised Ukraine that is forced to abandon its aspirations to join NATO and the European Union.

Trade policy will be another major issue. Trump is promising a blanket 10 percent tariff on all imports, and new tariffs of 60 percent or more on all goods from China—in addition to all the restrictions already introduced by the Biden administration. Faced with US tariffs and pressure from the Trump administration to apply its own tariffs on Chinese goods, Europe would find itself in an extremely difficult position.

But, again, there is no reason to expect that Harris would have a significantly softer China policy than Biden—whose approach has been much tougher than Trump’s was while in office. The anti-China consensus in the US is solid, and in her few public statements on the matter, Harris has voiced strong support for Taiwan and complained about China dumping ‘substandard products into our economy’. While her running mate, Tim Walz, has visited China many times, he has done so largely as an advocate of human rights.

Unlike Trump, Harris has been vocal in her support for America’s network of alliances. But this commitment might make her expect more from US allies. Moreover, since she is no dyed-in-the-wool Atlanticist like Biden, the broader trend of US foreign policy shifting away from Europe and toward Asia would persist. When Europeans talk about investing more in defence, they should ask themselves whether they are merely trying to placate Trump, or whether they are genuinely serious about providing for their own long-term security.

Much of the task of envisioning what a Trump or a Harris presidency would mean for Europe will fall on the new European Commission. It will have to start preparing Europeans so that they do not panic if their biggest fears regarding Ukraine or China are realised. Failure to do so will increase the likelihood of a disjointed response, with smaller member states possibly peeling off to pursue bilateral deals with the US. It will be up to the bigger countries to calm their smaller counterparts, especially in eastern Europe.

To that end, recasting relations with Britain could be a game-changer. If the EU and Britain can work in lockstep on geoeconomic issues, they will have more policy leeway and clout vis-a-vis the US and China. Although Britain cannot replace the US, its reintegration into European defence and technology frameworks could significantly bolster the continent’s strategic position. British prime minister Keir Starmer’s new government has already embarked on an enhanced security and defence partnership with Germany. Similar deals with likeminded members could follow, culminating in a pact with the EU as a whole.

Poland and the Baltic and Nordic countries will likely take the lead in pursuing this outcome, but French president Emmanuel Macron may emerge as the key swing vote. Will he embrace a geopolitical vision of bringing Britain into the European fold on defence, technology and climate issues? Or will he channel Charles de Gaulle by sidelining Britain, thus weakening the EU in the process? One thing is clear: whether the next US president is Trump or Harris, Europeans must start planning for a change.

Europe’s war jitters

Mark Twain is often quoted as saying, ‘History may not repeat itself, but it often rhymes.’ He might have added that when history does rhyme, the results are often disastrous. 

Just as the territorial ambitions of the Axis powers—Germany, Italy, and Japan—set the stage for World War II, the current authoritarian bloc of China, Russia, Iran, and North Korea seeks to dismantle the liberal international order. Now, as then, various conflicts around the world could spiral into a worldwide war. 

Consider, for example, the very real possibility that former US President Donald Trump will return to the White House in 2025. Given his blithe disregard for Europe’s security, it is clear why European countries, which have relied on the United States for their security since the end of World War II, should be concerned. 

But this is not just about Trump. Given China’s growing influence and the subsequent rebalancing of US strategic priorities, even a second Joe Biden term could lead to a reduced American commitment to NATO in favor of AUKUS, the military partnership that he created with Australia and Britain to face China’s threat in the Indo-Pacific. America’s waning interest in Ukraine underscores this shift, with Europe left to fill the resulting security vacuum.  

Consequently, fears of an imminent war have seized European capitals. Polish Prime Minister Donald Tusk recently said that Europe had entered a “pre-war era,” while European Commission President Ursula von der Leyen warned that a land war on the continent “may not be imminent, but it is not impossible.” Meanwhile, French President Emmanuel Macron has not ruled out the possibility of sending troops to Ukraine, and the United Kingdom’s Chief of General Staff, General Patrick Sanders, has called for ‘national mobilization’ and said British citizens must be ready to fight Russia.  

While Russia represents a distant threat to countries like Spain and Italy, most EU member states fear that Russian President Vladimir Putin is on their doorstep, highlighting Europe’s lack of strategic autonomy. McKinsey estimates that European countries saved $8.6 trillion over the past few decades, compared to average defense spending from 1960 to 1992, by downsizing their militaries. Mainly deployed in humanitarian and peacekeeping missions, European military forces have been described as ‘bonsai armies’—miniature versions of real armies, with limited combat experience. 

Moreover, given that Europe’s defense industry lags far behind Russia’s, and even more so the US’s, building up Europe’s military capabilities will probably take years. Tellingly, the entire ammunition stockpile of the German armed forces would sustain just two days of combat against an adversary like Russia. 

While Russia is not as strong as it once was, Europe has good reasons to be concerned. Putin’s determination to reverse the outcome of the Cold War has escalated into a near-religious obsession with restoring Russian imperial power. His war of aggression in Georgia in 2008, annexation of Crimea in 2014 and full-scale invasion of Ukraine in 2022 illustrate his relentless ambition. Under Putin, Russia’s ships and spy planes regularly survey the borders of countries like Sweden, Finland, the Baltic states, and even Britain. 

Putin’s aggression has forced Europe to abandon its post-historical mindset and get serious about rearmament. Military spending by the European Union’s member states reached a record of €240 billion ($260 billion) in 2022, 6 percent more than in the previous year, with McKinsey projecting that Europe’s annual defence expenditures could increase to €500 billion by 2028. 

The organisational and material degradation that Russia’s military has suffered during two years of intense fighting in Ukraine, along with the risk that a full-scale mobilisation for war with NATO could destabilise his regime, will likely deter Putin from embarking on additional military campaigns in the foreseeable future. If Russia’s gains in Ukraine are limited to its current defensive lines without a decisive victory—an outcome contingent on Western support for Ukraine—Putin’s appetite for further adventures in the Baltics would be severely diminished. Nevertheless, this would not prevent him from trying to destabilise Moldova, Georgia, the South Caucasus, the Western Balkans, and even France and Britain, nor would it limit the operations of his private military forces in Africa. 

But Putin’s nuclear threats reflect Russia’s inability to compete with NATO in a conventional arms race of the kind that crippled the Soviet Union in the 1980s. Even though European countries still spend less on defense than the NATO target of 2 percent of GDP, Russia cannot match the combined defense budget of NATO’s member states, even without the US.  

But while higher military spending could deter Russia from attacking European countries, larger defence budgets alone will not solve the continent’s strategic problems. To defend itself, Europe must also improve the integration and interoperability of its various military cultures and weapon systems. Given that this will be a prolonged process, von der Leyen’s proposal to establish an EU Defense Commissioner is a step in the right direction. 

Europe also needs to reduce its reliance on the US nuclear umbrella. Establishing an independent European nuclear deterrent, which only France and Britain can provide, is crucial to countering Putin’s aggression. Without such a deterrent, as The Economist put it in February, the same rationale that led France to develop its nuclear deterrent force—the notion that America would not sacrifice New York for Paris—could now extend to the rest of Europe: Would France be willing to risk Toulouse for Tallinn? 

That said, even if Europe were to improve its deterrence capabilities, it would be unwise to assume that leaders necessarily make rational decisions. In her 1984 book The March of Folly, historian Barbara Tuchman observes that political leaders frequently act against their own interests. America’s disastrous wars in the Middle East, the Soviet Union’s ill-fated campaign in Afghanistan, and the ongoing war of blind hatred between Israel and Hamas in Gaza, with its potential to escalate into a larger regional conflict, are prime examples of such missteps. As Tuchman notes, the march of folly is never-ending. That is precisely why Europe must prepare itself for an era of heightened vigilance.

Unity is Europe’s greatest asset

With the approach of June’s European Parliament elections, the grand coalition of the European People’s Party (EPP), the Progressive Alliance of Socialists and Democrats (S&D), and Renew Europe faces a watershed moment. The EPP’s recent decision to nominate European Commission President Ursula von der Leyen for a second term, far from being merely procedural, could have profound implications for Europe as it confronts internal and external challenges of unprecedented magnitude.

Together with its coalition partners, the EPP has steered the EU through multiple shocks over the past five years, including the Covid-19 pandemic, heightened tensions with China, Russia’s invasion of Ukraine, and the subsequent energy crisis. The EU’s achievements during this period have highlighted not only the resilience of the European community but also the crucial role of unity and the need to preserve the current coalition.

Moreover, these challenges have underscored the importance of upholding the intergenerational contract and foundational values that underpin the EU. This is particularly important in the face of mounting pressures from extremists and populists who advocate simplistic, short-term fixes instead of tackling long-term, complex challenges.

The EU’s agenda will likely remain dominated by persistent crises, necessitating a unified and thoughtful approach. The EPP-led coalition could play a crucial role, fostering stability and economic development while navigating the challenges Europe must face.

One of the main challenges will be the fight against climate change. Over the past few years, European leaders have worked together to protect the environment for future generations while striving to boost economic competitiveness. This collective effort has led to a significant reduction in transport-sector emissions and the adoption of the ambitious Fit for 55 plan, a comprehensive legislative package aimed at reducing the EU’s net greenhouse-gas emissions by at least 55% from 1990 levels by 2030. The plan includes binding targets for boosting renewable-energy production, reducing energy consumption, and lowering emissions in key industries.

Moreover, today’s geopolitical crises have brought security back to the top of Europe’s agenda, with EU member states aiming to de-risk energy value chains by focusing on renewables and efficiency measures. This strategic pivot reflects a broader commitment to sustainability that resonates beyond Europe’s borders, influencing energy policies around the world.

But this shift is not just about achieving climate goals. By focusing on renewable energies and de-risking supply chains, the EU also aims to shield European citizens and industries from the volatility of global energy markets, which are often influenced by geopolitical uncertainties. The bloc’s commitment to renewables is exemplified by Germany’s Energiewende (energy transformation) policy, as well as robust government investments in renewable energy in Denmark, the Netherlands, and Sweden. These strategic investments have also bolstered the competitiveness of these countries’ energy industries.

This is important because Europe is not alone in pursuing a sustainable future. Following the establishment of the EU’s emissions trading system, countries like Japan and Brazil have set up their own carbon markets. This global sustainability drive, while commendable, also means increased competition, again highlighting the need for unity as European countries seek to capitalise on the opportunities created by the green transition while striving to meet ambitious climate targets and tackle the complex challenges that come with implementation.

While unity is the EU’s greatest asset in the fight against climate change, the EPP’s leadership, in particular, must continue to play a central role in advancing the EU’s climate agenda. This is no time to backtrack. The expansion of the EU carbon market into new sectors like maritime transport, and the bloc’s prominent role in international climate negotiations, are prime examples of its proactive approach. Faced with the existential threat of climate change, EPP, S&D, and Renew leaders must draw on their experience, knowledge, and ambition to defend the bloc’s core values against rising populism and guide Europe through the challenging times ahead.

Far from being a distant threat, climate change is already wreaking havoc across Europe. At this critical juncture, Europe requires unity, vision, and bold leadership more than ever. The future of the bloc, the welfare of its citizens, and the success of its industries are in our hands. For responsible political parties, now is no time to make Europe a victim of partisan paralysis.

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