Donald Trump’s victory in the United States has activated all the alerts in the European Union. This is a general perception at the top of the community club. The Republican’s return to the White House, increasing tariffs on European products and threatening to leave the Twenty-Seven alone in supporting Ukraine, implies the need to act urgently. European leaders demand to equip themselves with more tools to guarantee economic security and sovereignty, increase productivity to boost security, and take a leap in defense to stop depending on the umbrella of the American ally. But the reality is that the heads of State and Government drag their feet when it comes to agreeing on concrete guidelines that combine – and above all finance – the enormous challenges on the table.
The European Union agreed this Friday in Budapest to “explore and take advantage of all financial instruments and tools”, as well as “develop” new formulas to boost European competitiveness, industry and the green and innovative transition and military needs, according to a statement signed by the leaders. But European leaders have not set a deadline for these “new tools,” with promises that are too “volatile and nebulous,” according to several diplomatic and community sources. “There is a lack of ambition despite the urgency of the moment,” says a senior community official. “It is a technocratic salad of elements,” says another.
The sense of urgency is now “greater than a week ago,” remarked the former president of the European Central Bank Mario Draghi. “Europe can no longer continue postponing decisions, as has been seen all these years, because we expected consensus. The consensus did not come, it only came less development, less growth and the stagnation that we have today, so I hope that we find a united spirit to find the best part of these changes,” urged the former Prime Minister of Italy, who is enjoying himself in Brussels. of a reputation as a great statesman. Draghi presented this Friday to European leaders his much-awaited European Union, which calls for financing a plan to reindustrialize Europe with common debt. The document points out the need to mobilize 800,000 million euros per year in investments to recover the ground lost with the United States and China.
Furthermore, a 10% increase in US tariffs – or even more – on all European imports could cost the Union around €180 billion, according to an estimate by the Institute of German Economics. The European Commission will present a strategy in June to implement the Draghi report, President Ursula von der Leyen declared this Friday. But this deadline does not match the urgency that leaders speak of. The head of the Community Executive emphasizes that in recent years some progress has been made, but also that weak points must be identified and work to solve them.
There were attempts to make a much more ambitious declaration of intent for the Budapest meeting, but EU leaders cannot agree on the formulas to pay the enormous bill of not being left behind. There is no appetite, at the moment, to put a common debt instrument on the table to finance it. Most leaders prefer to wait for the next multi-annual European budget, which is expected to be presented next summer. Or even the white paper on defense prepared by Von der Leyen, who is more in favor, however, of first clarifying which projects and plans the funds should be spent on. Only later would we have to figure out how to bring them together.
This Thursday’s summit – organized by Hungary and the last with Charles Michel as president of the European Council, who in December will hand over the position to the Portuguese Antonio Costa – was not to make important decisions, but to hold strategic debates, diplomats say. It was even thought that the leaders would boycott the summit by refusing to attend, given Budapest’s stormy start to the EU’s six-month presidency, with Prime Minister Viktor Orbán’s meetings with the leaders of Russia, Vladimir Putin, and China, Xi Jinping, to talk about Ukraine. Although the victory of the Republican candidate in the US could be a catalyst for the EU to begin to get its act together and raise its ambition ahead of the December summit, a few weeks before Trump’s inauguration.
One problem is that the 27 member states also do not share an approach on how to relate to the next American president. Trump now has many more allies at the helm of the EU than in 2017, when he began his first term. That will be the enormous challenge of this legislature.
Agreements with the new White House
Von der Leyen assures that, for the moment, the European strategy should be to find common points and then negotiate. And one of those points, following the transactional spirit that governed the Republican’s first term, may be to forge an agreement to buy more American liquefied gas, an option that would also lead to stopping buying Russian gas. “It is something that can be put on the table,” said the German conservative politician at a press conference in Budapest.
“One thing is clear, together, the EU, as Europeans, we must do whatever is necessary for our security,” said German Chancellor Olaf Scholz, greatly weakened after the breakup of the coalition government due to the departure of the liberals. “Don’t ask what the United States can do for you, ask what Europe should do for itself,” said Italian Prime Minister Giorgia Meloni. “Europe must find a balance in competitiveness, tariffs…” added the ultra leader.
The heads of state and government believe that Draghi’s report – and Enrico Letta, also a former Italian prime minister – is a good roadmap. But there is a long distance from theory to practice.
“In the economic sphere, Draghi has calculated it: recovering competitiveness will be expensive at first,” says Daniela Schwarzer, of the Bertelsmann Foundation. “If you do not want to accept American offers, or give in to their threats, you need financial resilience to withstand a conflict. Hopelessness can thus create the possibility of transforming Europe so that it remains in a more successful position later, not only vis-à-vis the United States, but also vis-à-vis other global actors; and in defense against threats and blackmail, both economic and military,” he adds.
The expert maintains that Europe should declare a “decade of security policy”, a decade-long plan with which States and the European Commission reduce or even transform the main weaknesses of their security into strengths. “It’s about money, a lot of money, but not only about that. The most difficult question will be to what extent Europe can make its new military and economic force credible and also serve as a united Europe,” he remarks by email.
The community club runs the risk of missing another train if it does not accelerate and if it does not put new ambitious mechanisms on the table. “The Union must act as an actor. If you are not on the table you are part of the menu,” said the high representative for Foreign Policy and Defense, Josep Borrell. And he added: “The most important thing is to build the EU as a great power, a brilliant entity, capable of acting. And not delegate our security to anyone.”
