Europe's Crossroads: Lead or Fade Away

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War is Declared! That’s the only conclusion I can draw, in the heat of the moment, about the long-term impact of Trump’s election. So, I dug in, had some deep conversations — and it’s convenient that I’m connected with some heavy hitters in international relations. Here’s what I’ve learned.

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Europe in a Bind: A Continent Under Siege

“The U.S. is in a trade war with China, China responds, and Europe? It’s safe.” That’s what we hear everywhere. But with $690 billion in trade exchanges (in 2023) linking the two giants, and China holding $770 billion in U.S. Treasury bonds, right behind Japan, the reality is much grimmer. They’re firing shots back and forth, but behind the waves of numbers and tariffs, Europe is inching ever closer to the exit... and I don’t mean an IPO.

The U.S. and China have grasped something fundamental that Europe has yet to integrate: in a globalized world, only bilateral interdependence preserves independence. For us Europeans, if we don’t embrace this logic, economic death is practically a given.

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Europe Facing Sino-American Protectionism: Crushed Between Two Strategies

With aggressive protectionist policies, the U.S. and China are slowly grinding Europe down to ashes while reinforcing their own interdependence.

• The U.S. Strategy: Washington keeps it straightforward: they amplify the model they've dominated since the 70s, now with a strong dose of protectionism. The goal? To keep pressuring Europe into handing over its economic and geopolitical levers to Uncle Sam. Military support, economic funding, tech innovation, strategic production: America’s got it covered, and Europe becomes just a passive consumer market. And to lock it all in? Rising import tariffs. It’s a flawless strategy, and the domination game is complete.

• The China Strategy: In Beijing, it’s all about raw efficiency. China takes everything the U.S. doesn’t want, building, step by step, its industrial power. State-funded infrastructure (public and private alike), entrepreneurs on the ground — this formula powers unmatched productivity, massive investments with no depreciation or amortization. The result? An unbreakable industry and innovation at ten times the speed. With centralized information, China produces technology faster, keeping a close eye on global leadership.

In the end, the U.S. scoops up the brains and innovation, while China claims industry and energy. And Europe? We’re left with… luxury goods and cognac. The “French Touch” is charming, but it’s no business model. And German cars? Trust me, BYD has already won that race.

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A Continent Lacking Vision for the Future

How did we end up here? Why doesn’t Europe have a strong response? It all boils down to one word: leadership. An economic zone, a continent — like any business or foundation — doesn’t work without a clear, powerful vision. And in Europe, it simply doesn’t exist.

Everyone can see China’s and the U.S.’s strategies. Europe isn’t naive; it sets up countless working groups to “find solutions.” But meanwhile, on the other side of the globe, leaders are pounding their fists on the table, making bold decisions and imposing their vision. And what do we do in Europe? We nod along.

Without leadership, without vision, without a decisive stance — Europe cannot exist.

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The Illusion of European Bilateral Interdependence

I’m not here to criticize for the sake of it, but let’s be honest: the Europe we cherish was built on a fragile promise. Emerging from World War II involved a French-German pact, a “we move forward together.” But aside from a shared border, our public, energy, and industrial policies, our economic visions — none of them align. There’s nothing truly binding us together. This alliance lacks a solid economic foundation. And the result? The U.S. and China have managed to build a vision, take the lead, and leave us in the dust.

And today? When we need a European leader more than ever, the two founding nations meant to forge this vision are in their own crises. France struggles to form a stable government, and in Germany, the current administration is falling apart. Finding a leader in Europe has never been harder.

Enter Mario Draghi, who, with clarity and conviction, slammed his fist on the table and proposed three key pillars to save Europe.

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A Future for Europe: Three Pillars for a Comeback

For Europe to survive, it needs a bold vision — one that stands strong, built on three undeniable pillars.

• Innovation or Nothing!

We have the ideas! We have the talent! Almost all the financing! But what we’re missing is a truly unified capital market and European financial instruments that actually fund… Europe! Today, it’s easier to raise funds in the U.S. thanks to their pension fund system, which is why our entrepreneurs are taking the first flight to Silicon Valley. Europe needs to become the go-to land of opportunity for European innovators. And if that means making reforms, let’s do it. Let’s create a real European market.

• Decarbonize Without Breaking the Bank

Europe is a leader in sustainability; let’s turn this DNA into a source of prosperity! Let’s put a real price on carbon and enforce it on imports. Yes, it will create inflation. Yes, there will be complaints. But in the long run, the costs will balance out through productivity gains and increased market share for our local industries. On the global stage, let’s be clear: this zero-carbon model is our vision, our identity. If it ruffles feathers, so be it. We own it, and we’ll create interdependence.

• Security and Independence: A Top Priority

Geopolitics isn’t about playing nice. In Europe, it’s time to embrace a protectionist policy by imposing a carbon tax and sector-specific taxes to protect our strategic industries. China has its eye on our industrial crown jewels — automotive, rail, aerospace, energy. Let’s respond with strong fiscal measures and drive our companies to become more productive and competitive. Now is not the time for wishful thinking.

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A Paradigm Shift: Investing in the Future

Finally, if Europe truly wants to transform its vision, it has to stop looking backward. For context, France dedicates 13.5% of its GDP to pensions, versus 6.8% to education. In other words, we’re funding twice as much for those no longer contributing as for those building our future. It’s high time we invest in the generations to come, creating genuine intergenerational altruism. Retirement? It should be a new chapter of life in service to the young!

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Awaken or Vanish

I’ll make a bet — if Europe doesn’t wake up, it will fade within the next five years. Geopolitical tensions will only intensify, China and the U.S. will dominate further, and what about us? We’ll be left with our Hermès scarves and cognac to help us forget. Let’s be bold: we either take the lead, or we embrace oblivion.

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This Isn’t Entrepreneurs’ Work

This is the job for politicians, public decision-makers. So entrepreneurs, don’t get caught up in the wrong fight — raise money where it’s available, sell where your market is — but keep your workforce and technology in Europe if you want to support Europe. And the day Europe rises to the challenge, be ready to invest your capital here.

Thanks for reading! Catch you soon, but before that ⤵️

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