CONTRIBUTING TO REINFORCING European sovereignty in a new world order.
Geopolitical tensions have been rising over several months. We are observing a world that is fragmenting and a new balance is emerging. In Ukraine, after three years of war, the population is exhausted. In the Middle East, the first phase of a truce ended with great uncertainty. In Syria, after the fall of Bashar al-Assad, the transition remains uncertain. In the United States, the Trump administration’s rise to power has led to restructured global relations, both diplomatic, as we see on the issue of the war in Ukraine, and economic, with another sharp increase in trade tensions.
EUROPE IN RELATION TO THE UNITED STATES AND CHINA
In this new world order, Europe must redefine its position to assert its interests, its values and its model. It can benefit from the negative effects, in the United States and China, of their fight for global leadership. As regards China, the tariffs imposed by the American administration will hamper an economic recovery that is already negatively impacted by a persistent real estate crisis, sluggish consumption and rising public debt. For the US economy, which has been in good shape until now, the trade war could lead to a resurgence in inflation, which could reduce Americans’ purchasing power.
“Europe must reform by simplifying:
bolstering its competitiveness and
its capacity to innovate will make it
more resilient in this new global order.”
To reestablish a leading position on the international stage, Europe must overcome its structural problems: high debt, stagnating productivity against the backdrop of an ageing population, falling industrial output and declining exports. The internal market is Europe’s great asset. It must be constantly improved. European growth will remain low in 2025. However, nothing is set in stone, and positive signs are discernible. Among the most significant indicators, the European Central Bank (ECB) is continuing to lower interest rates as inflation is contained. The dynamism of southern European countries and the prospect of easing regulations are other factors to elicit optimism. In this regard, I hope that the European Commission’s Competitiveness Compass(1) may serve as a roadmap to put the European economy back in the global race. Europe must reform by simplifying: bolstering its competitiveness and its capacity to innovate will make it more resilient in this new global order.