The President of the United States is exploiting the EU’s most fragile points to press his demands on the community club, forcing humiliating agreements, such as the tariffs agreed last July, or subjecting it to unrestrained harassment as in the case of Greenland’s sovereignty. In a way, this amounts to self-inflicted damage by the EU or, at least, damage facilitated by numerous miscalculations of political and geostrategic nature made by the Brussels bloc over the past quarter-century.
The Union has repeatedly failed to meet the goals it set for itself to boost its competitiveness, has slowed advances toward strategic autonomy due to archaic national scruples, and has ignored warnings from Washington about a dangerous strain in the traditional transatlantic relationship. Trump is now making those European governments pay a high price for these negligencees. The President of the European Commission, Ursula von der Leyen, stated yesterday in Davos that “the seismic shift we are living through is an opportunity for Europe” and that “this new Europe is already emerging.” Yet the club’s recent history does not corroborate such optimism.
Twenty-five years and few changes
The Union arrived at the twenty-first century with a firm footing. With a newly launched single currency, with eastward enlargement toward Central and Eastern Europe nearly complete, and with the apparent desire not to be outpaced economically by the U.S., and far less by a China that still appeared a lagging competitor.
The fifteen EU members of that era were going all out, and they left it on paper at the Lisbon European Summit in March 2000: “The Union has set itself today a new strategic objective for the coming decade: to become the world’s most competitive and dynamic knowledge-based economy.”
“The dependence on the U.S. has surged not only in the traditional matter of defense but also in the management of daily life for citizens and businesses”
A quarter of a century after that solemn declaration —signed by politicians now forgotten or almost forgettable such as Chirac, Schröder, Blair or Aznar— the Union has lost ground in the race for technology, both relative to the U.S. and to China. The dependence on the U.S. has surged not only in the traditional realm of defense but also in the management of daily life for citizens and businesses, for whom the services of the major American digital platforms have become virtually indispensable and often vital.
“The key to the rise of the UE-US productivity gap has been digital technology, and today Europe seems to be falling even further behind,” diagnosed last year by the former President of the European Central Bank, Mario Draghi, in his renowned report on the future of European competitiveness.
Three American companies — Amazon, Microsoft and Google — dominate 66% of Europe’s cloud infrastructure, with 92% of Western data stored in the U.S. European behemoths like Airbus are only just beginning this year to seek a European alternative to have a sovereign cloud that would not be subject to Washington’s orders.
Europe’s technological lag largely stems from a lack of private investment. In 2021, European companies invested 270 billion euros less in R&D (research and development) than their American rivals, according to Draghi. And the top three invested sectors were automotive in the Old Continent, whereas in the U.S. it was technology.
Brussels’ unfinished challenges
Europe has also not shown resolve in other fields. The Mercosur trade agreement, whose signing last Saturday was presented as a response to Trump’s protectionism, has taken more than twenty-five years to negotiate. The Union Bank (Banking Union) agreed in 2012 will reach a decade and a half without being completed. The Energy Union was announced with fanfare in 2015. But the market remains fragmented and interconnection still far from the 10% target set for 2020 in countries like Spain, France, and Italy. Russia’s energy dependence has been reduced, but at the cost of increasing dependence on the U.S., just as the White House appears more unpredictable and dangerous than the Kremlin.
“The most innovative newly established European companies relocate their headquarters to the U.S. to seek financing they cannot obtain on this side of the Atlantic”
The Capital Markets Union, intended to improve corporate funding and to prevent 300 billion euros of Europeans’ savings from being invested in the U.S. each year, was announced in 2015 with a view to completing it in 2019. A year after that deadline it was relaunched. Today it remains unrealized. A telling example: the most innovative newly created European companies relocate their headquarters to the U.S. to seek funding they cannot obtain on this side of the Atlantic: 30% of unicorns founded in Europe cross the Atlantic for that reason.
And in some indicators that the Commission uses to measure capital markets integration, there has been a retreat. For instance, in the non-banking financing ratio for companies, in 2024 it stood at 49.6%, one point lower than ten years earlier. Or the use by SMEs of financing methods such as equity participation (instead of loans), which was 11.7%, two points lower than in 2015.
Von der Leyen also reiterated yesterday in Davos her intention to propose the so-called 28th regime, a supranational framework that would allow creating a company in any member state within 48 hours to operate across the Union. The President did not mention that this regime was created more than twenty years ago, was called Societas Europaea, and has been an absolute failure.
In all the aforementioned policies, by the way, unanimity is not required to move forward. This shows that the feared veto, often invoked as an excuse to justify a lack of progress, merely conceals a lack of political will to complete the promised projects.
In the defense sphere, one of the EU’s most glaring Achilles heels, national budgets have risen dramatically. In 2021, a year before Russia’s invasion of Ukraine, EU members allocated a total of 218,000 million euros to defense. Only four years later, the European Defence Agency estimates that figure reached 381,000 million euros in 2025, a 75% increase. And according to the same Agency, annual defense spending would have to reach 630,000 million euros to meet the 3.5% NATO target demanded by Trump.
The White House preys on a disoriented Europe
The main beneficiary of that defense spending is none other than Trump because the bulk of supply comes from American companies. By contrast, it does not proportionately translate into Europe’s security. According to Brussels, much of the budgetary effort is wasted due to lack of coordination, since purchases are repeated from one country to another with little coordination. The European Defence Agency set the goal in 2007 that 35% of acquisitions be done jointly. Almost twenty years later, that percentage remains under 3%. Projects like the future European combat aircraft, launched almost a decade ago, remain as a mere prospect with no aircraft in sight so far.
The result of all these delays and failures is that the EU gives off a sense of paralysis and impotence. The EU does advance, despite everything. But too often it rests on its laurels. And the apparent chaos fuels the catastrophist manipulation cultivated by the radical Eurosceptic right.
“Washington has even officially announced its intention to support political groups that advocate renationalizing European policies”
The Trump Administration has not hesitated to join the chorus of arguments about the obsolescence of the European Union. Washington has even officially announced its intention to support political groups that advocate renationalizing European policies and to combat the activities of a European Union that, according to the White House, “undermines political freedom and sovereignty“.
In normal times, the EU’s procrastination on crucial issues might have seemed harmless and accepted as inherent to a club capable of making big leaps only in moments of deep crisis. But with a foe like Trump, ready to capitalize on all of Europe’s vulnerabilities, the Twenty-Seven may no longer be able to afford systematically failing to meet their own commitments. As Von der Leyen said yesterday, “if change [in the world order] is permanent, Europe must change permanently as well.” The survival of its model of integration and coexistence is at stake.
