The geopolitical landscape of the 21st century is shifting rapidly, demanding a reassessment of established security structures. For decades, the European Union has relied on the North Atlantic Treaty Organization (NATO) as the bedrock of its security. This alliance provided stability during the Cold War, but in today’s multipolar world, this deep and limiting dependency on the United States is becoming increasingly untenable.
If the EU is to become a truly independent global actor, it must make the difficult but necessary decision to step out of NATO and build its own sovereign defense architecture. One of the clearest, most damaging proofs of this divergent reality can be found in the West’s fractured approach to Iran.
The Divergence of Strategic Interests and the Iran Lesson
The core of the problem lies in the fundamental strategic priorities of Washington and Brussels, which are no longer fully aligned. While the United States is increasingly focused on the Indo-Pacific region and its systemic rivalry with China, Europe’s primary security concerns remain centered on its immediate neighborhood: Eastern Europe, the Mediterranean, North Africa, and the Middle East.
This divergence is nowhere more apparent than in the catastrophic failure of unified transatlantic policy towards Iran. For decades, European powers, notably the E3 (Germany, France, and the UK), led meticulous diplomatic efforts to prevent an Iranian nuclear weapon, culminating in the Joint Comprehensive Plan of Action (JCPOA) in 2015. This agreement was hailed as a benchmark for European soft power and a critical security measure for the region.
However, the 2018 unilateral withdrawal from the deal by the Trump administration, followed by the re-imposition of crippling economic sanctions, fundamentally undermined European strategic interests. The EU was effectively held hostage by American policy. European businesses, which had started to invest in Iran, were forced to retreat, and European banks were threatened with exclusion from the US financial system.
The EU’s subsequent attempts to create alternative payment mechanisms, like INSTEX, proved ineffective, highlighting how American unilateralism can invalidate European sovereignty. The US’s “maximum pressure” campaign on Iran, far from stabilizing the region, heightened tensions, creating a direct security threat for Europe.
The lesson from Iran is clear: As long as the EU is bound within a security framework dominated by the United States, it will remain vulnerable to Washington’s policy swings. European security and economic interests are too often subordinated to American strategic goals, limiting Europe’s diplomatic flexibility and its ability to engage with critical regional actors on its own terms.
The Catalyst for Military and Technological Autonomy
True geopolitical power requires military and technological independence. Currently, European defense relies heavily on American hardware, intelligence, and command structures. This reliance creates a comfort zone that prevents the European defense industry from reaching its full potential.
Leaving NATO would serve as a forced catalyst for integration. It would compel the EU to consolidate its fragmented military capabilities, invest heavily in its own defense technology, and create a unified European command. Instead of buying off-the-shelf American systems, European capital would flow into European innovation, strengthening our technological independence and creating a robust, self-sufficient defense industrial base.
Confronting the Consequences
We must be realistic about the consequences of such a monumental shift. Transitioning away from NATO is not a step to be taken lightly. The immediate effects would be severe and demanding:
Financial Burden: The cost of replacing the American security umbrella will be immense. EU member states will need to drastically and permanently increase defense spending, diverting funds from other national budgets.
Short-Term Vulnerability: During the transition phase, the EU would experience a temporary gap in deterrence capabilities, particularly regarding nuclear deterrence and high-end military logistics.
Diplomatic Friction: A European exit from NATO would fundamentally alter transatlantic relations, likely leading to economic and political friction with the United States and non-EU NATO members like the United Kingdom.
Internal Political Division: Forging a unified European army and foreign policy will require overcoming deep-seated national interests and political resistance within the EU itself.
The Path Forward
Despite these daunting hurdles, the challenges are not insurmountable. Every complex systemic problem can be analyzed and solved with sufficient political will and strategic foresight.
For the European Union to secure its future, protect its economic interests, and stand as an equal among global superpowers, it must graduate from its historical reliance on Washington.
The path to a sovereign, secure, and technologically independent Europe will be expensive and politically fraught. However, the alternative is to remain a permanent junior partner in a changing world order.
True European autonomy is only possible outside the confines of NATO.
In the coming years, Europe will invest billions more in defense. Although spending is at an all-time high, experts warn of three critical mistakes that could cause these funds to evaporate without genuinely improving security.
Inefficient Procurement and Dependency
Europe now spends nearly 400 billion dollars annually on defense. Notably, Europe’s spending within the Nato alliance has now surpassed that of the United States.
However, this does not translate into proportional military capability. Due to the lack of a unified approach, each country procures its own equipment, resulting in Europe having four times as many different weapon systems as the US. Moritz Schularick of the Kiel Institute emphasizes that despite outspending America, Europe remains entirely dependent on the US.
Buying Yesterday’s Weapons
Recent exercises in Estonia revealed that European allies are unprepared for modern warfare involving drones. While significant funds are allocated to conventional weapons, venture capital investment in defense innovation like AI is eight times higher in the US. Schularick argues that Europe should stop ordering manned systems and instead invest in the autonomous military vehicles of the future.
Neglecting Diplomacy
Experts note that increased defense spending often comes at the expense of diplomacy. For every 42 euros spent on weapons, only 1 euro is allocated to diplomatic consultation. Neglecting conflict prevention and structural issues like climate change could lead to greater long-term instability and migration flows toward Europe.
For decades, the dream of a “United States of Europe” has been the North Star for federalists in Brussels. They marched under various banners, Communities, Unions, and Councils, always pushing for a singular, synchronized leap toward integration. However, the reality of 2026 suggests a different path. We are witnessing the birth of what some playfully call the “European Onion”: a multi-layered, pragmatic model of continental cooperation.
The European Onion
Beyond the One-Size-Fits-Old Model
The traditional EU approach, where every member must move at the same speed, is increasingly hitting a wall. In a geopolitical climate that demands rapid responses, the “slowest member” rule has become a liability. Whether it is military autonomy, trade policy, or technological independence, Europe can no longer afford to wait for total consensus.
The “Onion” metaphor, popularized by Belgian Prime Minister Bart De Wever, envisions a Europe of concentric circles:
The Core (The Kernel): A pioneering group of “heavy hitters”, like the E6: France, Germany, Italy, the Netherlands, Poland, and Spain, pushing for deeper economic and military integration.
The Inner Layers: Countries participating in the Single Market and Schengen but perhaps opting out of certain federalist deeper dives.
The Outer Layers: Strategic partners like Ukraine or even the UK, who require a functional relationship with the bloc without immediately meeting every rigid bureaucratic standard.
Pragmatic Federalism in Action
We are already seeing this “variable geometry” take shape. When financial aid or security measures are blocked by a small minority, “coalitions of the willing” simply move forward. This is not about creating second-class citizens; it is about pragmatic federalism.
History shows that where pioneers lead, others eventually follow. The Euro and the Schengen Area both started as smaller projects before becoming continental standards. By allowing a vanguard to forge ahead, we prevent the entire European project from ending in tears due to inertia.
If the current structure of the EU is too rigid for the modern world, we must be bold enough to peel back the layers and redesign it. A multi-speed Europe is not a sign of weakness; it is a strategy for survival.
In the face of competition from the United States and China, Emmanuel Macron is calling for “joint investment.” In an interview with several European newspapers, the French President invited his European counterparts to invest in the ecological transition, artificial intelligence, and quantum computing to avoid being left behind.
Macron Calling for Joint European Investment in Strategic Sectors
A Call for Sovereignty and Shared Debt
”For nine years, I have advocated for a more sovereign Europe,” Macron stated this Tuesday, February 10, just two days before a meeting of EU heads of state and government in Brussels. The President believes that trade threats and “intimidation” from the United States are not over. He warned that the twenty-seven member states will be “swept away” if they do not establish a European preference in strategic sectors.
To cement European power, Macron is pushing for a common debt capacity to fund future expenditures (Eurobonds). This joint borrowing would finance strategic investments and allow the European Union to “tackle the hegemony of the dollar.”
Three Key Battles
Macron identified three critical areas where Europe must act within the next three to five years to remain relevant:
Security and Defense Green Transition Technologies Artificial Intelligence and Quantum Computing
“In all these areas, we invest much less than China and the United States,” Macron explained. He estimates the required public and private investment at approximately €1.2 trillion per year. He emphasized that these efforts must be collective rather than national to avoid fragmenting the internal market.
Consistent Protection, Not Isolationism
Regarding protectionism, Macron clarified that the goal is consistency rather than isolation. “The Chinese do it, the Americans do it too. Europe is currently the most open market in the world.” He argued that it is illogical to impose strict rules on European producers that do not apply to non-European importers.
He cited several examples of this new direction:
Opposing the EU-Mercosur trade agreement, which he labeled a “bad deal.”
Implementing taxes on over-subsidized Chinese electric vehicles.
Introducing safeguard clauses on steel.
The recently presented “Car Plan” by the Commission, which features a clear European preference.
The French economy has long been the problem child of the European Union. With the recently passed budget by Prime Minister Lecornu, little seems set to change. Economists and professors are increasingly alarmed by the state of France’s finances. “Our country has become the Argentina of Europe. France is trapped in a hellish spiral leading it toward third world status,” warns Nicolas Baverez, a renowned French economist.
French Economy in Decline
The current state of the French economy is clearly reflected in its inflation figures. While inflation in many European economies has stabilized around 2%, Paris reports an unexpectedly low figure of 0.4%. For years, France has struggled with sky high national debt, while the budget deficit continues to spiral out of control. Attempts to tackle these deficits repeatedly hit a political dead end. Furthermore, major reforms never see the light of day because the French parliament is extremely divided, a situation that recent parliamentary elections have failed to resolve.
A Tax Trap
The core of the problem is that potential tax hikes may not provide a way out. Although they increase revenue, the national debt will continue to grow as long as government spending remains unchecked.
Frédéric Douet, a professor of private law, observes how France is “slowly impoverishing” due to “consistent policies that are both costly and inefficient.” Writing in an op ed for Le Figaro, he expressed his disdain: “The mantra of our technocrats and politicians is that higher taxes will solve our problems.”
High Unemployment and Low Productivity
These concerns are well founded. For the third consecutive year, France’s GDP per capita has fallen below the European average. Additionally, inflation sits far below the eurozone average, and the country faces significantly higher unemployment than the EU mean. Baverez warns that raising taxes will be counterproductive, pushing more people into poverty without necessarily generating immediate revenue.
The economist is also critical of the tax measures in the new budget, which aims to raise an additional 44 billion euros, including 12 billion euros from the corporate sector. Baverez warns that these plans accelerate France’s “financial suffocation” and create “the conditions for a major financial shock.” If France continues on this path, he fears the country will “no longer be among the world’s ten largest economies” by the end of this decade.
Europe must transform into a federation to survive in a world where the United States and China are rewriting the rules of the game. This was the core message from Mario Draghi, former President of the European Central Bank (ECB) and former Prime Minister of Italy. “We must decide whether we want to become a global power or remain subject to the priorities of others.”
Mario Draghi
Mario Draghi advocates for a European federation to stand firm against superpowers like the US and China. Receiving an honorary doctorate at the University of Leuven (Belgium), Draghi argued that Europe must choose between being a market subservient to outside interests or becoming a sovereign global force. He proposes “pragmatic federalism,” where willing nations start building joint institutions with real decision-making power in specific sectors.
The Collapse of the Old World Order
During his acceptance speech at KU Leuven, the man credited with saving the euro did not mince words regarding Europe’s precarious global standing. Draghi noted that the global order, which underpinned European prosperity for decades, has permanently collapsed. This shift is driven by the changing stances of major powers.
”Beijing controls critical points in global supply chains and does not hesitate to use that power as leverage,” Draghi remarked. “Meanwhile, our traditional ally, the US, is increasingly focused on its own costs and less on the mutual benefits derived from cooperation with Europe.”
”We are facing a future where Europe risks becoming simultaneously subordinate, divided, and deindustrialized.”
Mario Draghi
From Confederation to Federation
To counter these threats, Draghi insists Europe must move away from its current model as a confederation (a loose collection of states with veto powers) and evolve into a true federation, effectively a “United States of Europe.”
”A group of states that merely coordinates remains just a group of states,” he argued. “We must decide: do we remain just a large market subject to the priorities of others? Or do we take the necessary steps to become a global power?”
He pointed out that while Europe acts as a unified bloc in trade, competition, and monetary policy (earning respect as a global player) it remains a “loose collection of mid-sized states” in areas like defense and foreign policy. This fragmentation makes the continent vulnerable to being “picked off one by one” by superpowers.
The Greenland Precedent
Draghi cited Europe’s military deployment to Greenland as a prime example of successful unity. This move followed repeated suggestions by U.S. President Donald Trump regarding placing the island under American authority.
”By acting together against a direct threat, Europeans discovered a level of solidarity that previously seemed unattainable,” Draghi noted. He believes this shared determination resonated far more with the public than the typical declarations following European summits.
Pragmatic Federalism
Draghi’s solution is “pragmatic federalism.” This approach does not require every nation to hand over power in every sector immediately. Instead, he suggests that countries willing to cooperate should lead the way in specific domains such as energy, technology, or defense.
”As Robert Schuman said in 1950, Europe will not be built all at once,” Draghi reminded his audience. “Not all countries will participate in every initiative from the start. The door remains open to others, but not to those who would undermine the common goal.”
His vision involves building common institutions with genuine authority to act decisively under any circumstances. He pointed to the success of the Euro as the ultimate blueprint: a group of countries took the lead, built institutions with real authority, and created a bond of solidarity that goes deeper than any treaty.
Watch Mario Draghi’s speech in Leuven (from the 4th minute onwards):
The European Union and India have reached a historic free trade agreement following nearly twenty years of negotiations. Described as one of the largest trade deals ever brokered, the pact establishes a trade zone encompassing two billion people.
”We have created a free trade zone for two billion people that will benefit both sides,” says European Commission President Ursula von der Leyen.
Indian Prime Minister Narendra Modi echoed this sentiment, stating: “This agreement will unlock immense opportunities for India’s 1.4 billion citizens and millions across Europe.” Together, the EU and India account for 25% of the world’s gross domestic product (GDP).
According to the Commission, the deal is expected to double European exports to India. However, the agreement still requires formal approval from EU Member States and the European Parliament before the new regulations take effect.
Cars and Wine: Slashing Tariffs
Trade in goods between the two blocs has already doubled over the past decade. This new treaty aims to eliminate approximately 90% of existing tariffs between Europe and India.
The deal offers a significant boost to the European automotive industry, with Indian import duties on European cars set to plummet from 110% to just 10%. European winemakers also stand to gain, as tariffs on their products will drop from 150% to approximately 25%.
Shifting Geopolitics: Seeking New Allies
The timing of the accord is inextricably linked to the economic trajectory of the United States. The Trump administration recently imposed a 50% import tariff on India due to its trade in Russian oil, while simultaneously threatening the EU with new levies.
In response, the EU and India are seeking to reduce their dependence on the U.S. by strengthening bilateral ties. “This is only the beginning,” Von der Leyen emphasized. “We will continue to expand and reinforce our strategic partnership, demonstrating to the world that rules-based cooperation still delivers exceptional results.”
A Broader Trade Offensive
The India deal is part of a wider EU strategy to secure global economic partnerships. Von der Leyen is also pushing for the swift implementation of the Mercosur agreement—a trade pact recently finalized with Brazil, Argentina, Uruguay, and Paraguay.
The Mercosur deal has faced delays, however, as the European Parliament awaits a ruling from the European Court of Justice. Lawmakers have expressed concerns regarding the agreement’s impact on the competitive position of European farmers.
Beyond India and Mercosur, the EU is actively negotiating deals with Australia, Malaysia, the Philippines, Thailand, and the United Arab Emirates. Recent agreements have already been secured with Indonesia and Mexico.
The trade treaty with India is not yet final; it must still be ratified by India, the EU Member States, and the European Parliament.
After weeks of threatening language from the American presidency, the European Union has reached its limit. Yesterday, the 27 member states proposed a 93 billion euro package of measures following the announcement of import tariffs on eight European countries participating in a Greenland mission.
US-EU Greenland Conflict
EU Strategy
Whether this will be enough to force a reversal of policy remains to be seen. However, observers suggest the EU has more than one strategic advantage.
There is a growing realization among member states that a firm stance is now required. When an ally threatens to seize territory from a European nation, the Union is left with no other choice.
The EU package is viewed as a significant opening signal. The measures involve import tariffs on American products such as jeans, motorcycles, and aircraft. These products are primarily manufactured in regions with high concentrations of government supporters. By targeting these areas, the EU believes it can cause significant economic and political pressure.
The announced 10 percent import tariff for the eight countries, including the Netherlands, is set to take effect on February 1. If this plan is not withdrawn, the European counter-tariffs will also commence.
EU member states hope to avoid this escalation through diplomacy. In the coming week, efforts will be centered on the annual meeting of the World Economic Forum in Davos, where many leaders will be present. However, the period of caution and accommodation appears to be over, replaced by a shift toward firmer action.
The EU had already drafted this list of import tariffs last year following the outbreak of a global trade war. While the measures were withdrawn after a temporary agreement in July, they were brought back into play during an emergency meeting yesterday.
‘Trade Bazooka’
The EU holds another major strategic asset: the Anti-Coercion Instrument (ACI). This tool, often referred to as the ‘trade bazooka’, allows the EU to deny companies from third countries access to the European internal market.
This instrument has been in development for several years, intended primarily as a deterrent. The expectation is that the threat of its use should be sufficient to prevent economic aggression from other nations.
While there have been repeated calls for its deployment over the past year, the likelihood of it being activated has now increased significantly.
Boundaries
The EU is currently navigating a difficult diplomatic path. While it is deemed necessary to use the language of power to influence decision-making, there are clear risks involved.
A major concern is the potential impact on other geopolitical conflicts, such as the situation in Ukraine. A severe escalation in trade tensions could lead to a scenario where security guarantees for Europe are weakened, a situation that must be avoided.
Despite these risks, there is a consensus that the EU must keep all options on the table. The European market remains the most powerful tool available, and there is a readiness to utilize the provisions within the anti-coercion instrument if necessary.
Playing on Prestige
Strategic efforts may also focus on the American desire for historical prestige regarding the acquisition of Greenland. This ambition has existed for over a century, though previous attempts were always rebuffed.
The EU can frame the consequences of this conflict by highlighting how such actions could be remembered as the catalyst for the fragmentation of Western alliances and NATO. This appeal to historical legacy is seen as a potential point of leverage.
What is the ‘trade bazooka’?
The term trade bazooka is the unofficial nickname for the European Union’s Anti-Coercion Instrument (ACI). This is a powerful trade policy weapon that was officially adopted in 2023.
This is what the instrument entails:
Purpose: It is designed to retaliate when non-EU countries apply economic pressure to force the EU or a member state into specific political concessions.
Extensive powers: Beyond standard tariffs, the EU can deny companies access to the internal market, restrict foreign investment, block access to public contracts, and limit intellectual property rights.
Speed: The European Commission has been granted the authority to act faster and more decisively, reducing the time previously required for consensus among all member states.
Deterrence: The impact of these measures is designed to be so significant that the mere threat should discourage other countries from attempting economic blackmail.
The global economy rests on a delicate balance of trust and investment. At the heart of this system lies the US Treasury market. However, a hypothetical scenario exists that economists often describe as a financial nuclear bomb.
This scenario is no longer just a mathematical exercise but a potential geopolitical tool. If the United States, under the Trump administration, were to take the unprecedented step of militarily attacking and conquering Greenland, Europe could be forced to respond with its most powerful economic weapon.
Imagine if every European entity (including governments, central banks, and private investors) decided to simultaneously dump their combined holdings of approximately $3.6 trillion in US Treasury bonds as a direct consequence of such an invasion.
The Chain Reaction
If this “horror scenario” were to unfold, here is the step by step breakdown of what would likely happen:
A Crash in Bond Prices: A sudden flood of $3.6 trillion worth of bonds onto the market would cause their value to plummet instantly due to the massive oversupply.
Skyrocketing Interest Rates: As bond prices crash, the yields (interest rates) would spike to extreme levels. This would make US government debt significantly more expensive to maintain.
The Dollar in Freefall: To exit these investments, European investors would need to sell their US dollars. This massive sell-off would likely cause the value of the US dollar to collapse against the Euro.
Global Market Chaos: Because the US Treasury bond is the benchmark for the global financial system, its collapse would trigger a domino effect. Stock markets would likely tank, and borrowing costs worldwide would become unaffordable overnight.
While the military conquest of Greenland remains a shocking concept, this financial “nuclear option” highlights that Europe’s choice to divest could be the ultimate check on such a massive shift in international relations.
If you had followed the economic forecasts at the start of 2025, you’d have been tempted to hide under the stairs with a blanket and a survival kit. The narrative was clear: the return of Donald Trump and his aggressive tariff regime would signal the end of the global economy as we knew it.
Experts predicted the largest trade shock in history, with some warning that a global recession was almost a mathematical certainty.
Yet, as we reach the end of the year, the wreckage is surprisingly hard to find. The world is still turning. While growth has slowed, the much feared recession hasn’t materialized. Global trade has undergone massive shifts behind the scenes, but it has neither halted nor collapsed. This raises a fundamental question: are our economic models broken, or has the global trading system proven far more resilient than anyone dared to hope?
Uncertainty as a Tool
One reason the dire predictions missed the mark is that they took initial announcements at face value. It has since become clear that the “April shock” of sky-high tariff announcements was a deliberate strategy of injecting uncertainty into the market to gain leverage. The goal was always to start high and negotiate down. While journalists and analysts were asking what the direct impact of a 27% tariff would be, the reality on the ground was a moving target. By November, after rounds of intense negotiations, the effective average tariff had dropped to 17%. While this is still significantly higher than the pre-2025 average of 2.5%, it is a far cry from the “total trade war” originally envisioned. Most major economic blocs managed to negotiate their way down, leaving China as the only player facing extreme rates above 40%.
Restraint and Resilience
The second reason we avoided a total meltdown was a surprising display of global self-discipline. The catastrophic scenarios relied on a domino effect of retaliatory tariffs. However, most of the world chose not to strike back in kind. Because the primary burden of a tariff falls on the country imposing it (as a tax on its own importers), the rest of the world avoided much of the pain by simply refusing to escalate. It was a calculated choice of restraint over ego.
Furthermore, global trade proved to be remarkably agile. We often think of international commerce as a slow-moving tanker, but this year showed it can pivot like a speedboat. When routes to the U.S. became too expensive, fleets redirected, and trade intensified within other regions. While exports from Europe to the U.S. have dipped, they haven’t cratered. Meanwhile, global trade in goods actually rose by over 6% this year. The old adage that “when America sneezes, the world catches a cold” no longer seems to hold true; we are moving toward a more balanced, less U.S. centric global economy.
The Hidden Toll
Does this mean the tariffs were a victimless policy? Far from it. While the “doomsday” didn’t happen, a slow erosion is visible beneath the surface.
The pain is currently being masked by corporate buffers. To avoid losing market share, exporters are slightly lowering their prices, while U.S. importers are eating into their own profit margins or cutting costs elsewhere rather than passing the full cost to the consumer immediately. Additionally, many companies stockpiled goods before the tariffs took effect, allowing them to sell older, cheaper inventory throughout the year.
However, these buffers are not infinite. Inflation in the U.S., which had been trending downward before the inauguration, has begun to creep back up. The promised manufacturing boom has yet to materialize, and job growth has stalled. Perhaps most tellingly, the tariff revenue is nowhere near enough to replace income tax, as was once claimed.
The real test will come in the next six months. As stockpiles empty and profit margins hit rock bottom, businesses will be forced to pass costs onto the public. This won’t just affect imported goods, but will trickle down into services like healthcare and hospitality. The economic “hell and damnation” didn’t arrive with a bang in early 2025, but for the American consumer, it may yet arrive with a whimper just in time for the midterm elections.
Manage Cookie Consent
To provide the best experiences, roelthijssen.nl uses technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
