In Summary
Strategic autonomy is an illusion: The EU should not strive for complete geopolitical and economic independence, but should instead embrace strategic dependence in order to expand its sphere of influence and remain competitive.
The Third Way as an alternative: Europe must cooperate more closely with middle powers such as India, Canada and Japan to form a geopolitical counterweight to US and Chinese dominance.
Multilateralism and pragmatism: The EU must respond to trends such as informal alliances, regionalisation and compartmentalisation in order to strengthen its geopolitical position and revitalise multilateral cooperation.
Europe Update | Trump’s Presidency is worth a pat on the back: Europe has been forced to grow up. In his treacherous speech in Munich – a cynical twist of fate? – Vance fired the final torpedo at the main pillar of the post-war world order: close transatlantic cooperation. It is high time for us to come of age geopolitically. How can we make the European voice – capricious, shrill and fragile as it is – heard and ensure it remains so in a world order that is crumbling before our very eyes?
As a European remedy against Trumpism, many advocate ‘strategic autonomy’. Under this policy motto, the EU is striving for greater geopolitical independence. The watchword is to become less reliant on the American security umbrella and the Chinese manufacturing sector.
That desire may well be understandable. Former European Commissioner Federica Mogherini first used the term strategic autonomy in official EU documents in 2016, against the backdrop of the rise of Trumpism. Now that Trumpism is taking on life-threatening forms, the EU never wants to surrender itself again to the whims of a superpower that could dominate us. And rightly so.
Yet strategic autonomy is a misleading goal in a deeply interconnected world, even for the EU as an economic giant. This applies to strategic autonomy in both production and decision-making. The costly illusion of self-sufficiency and a blind spot that undermines influence in the multipolar world order lie in wait.
Extremely costly
Firstly, strategic autonomy in terms of our production is extremely costly. Annual cost: 2 to 5 per cent of European GDP. This high price tag stems from the necessary investments in numerous production chains and infrastructure. Under European budgetary rules, this is unfeasible for most countries, particularly given the debt positions of many Member States.
And bear in mind: this will, in part, merely lead to the replacement of existing production capacity, and not even to an upscaling. Furthermore, investments of this magnitude come up against the limits of the European labour market and energy supply. Moreover, the spectre of inflation looms large.
Of course, in specific cases, the autonomy gained is well worth the high price. Think of the much-needed expansion of the defence industry, independent infrastructure for AI systems and space technology. Europe must focus primarily on high-value, labour-intensive industries.
But more often than not, the costs involved outweigh the autonomy gained – if it is achieved at all. For example, only limited gains are to be made from the (re)development of industries such as solar panels, wind turbines, fertilisers and perhaps even batteries. Tough choices must also be made regarding which raw materials Europe wishes to extract and process itself.
There is already a threat of deindustrialisation as a result of high energy prices and scarcity. The EU would therefore be wiser to choose its dependencies – on whom and for what – very strategically, rather than focusing on autonomy.
If this does not happen, the loss of comparative trade advantages and economic inefficiencies could cause significant damage to Europe’s competitive position. Higher production costs and inflation would then erode European prosperity and economic clout, resulting in precisely less strategic autonomy and the rise of unsavoury players.
An additional danger is that this path could undermine the EU’s rule-setting power, due to an even sharper relative decline in the European economy compared with global GDP. Moreover, the high cost could come at the expense of Europe’s ability to invest in fundamental research, high-quality innovation and R&D.
Sphere of influence
The issue of European strategic autonomy in terms of decision-making is more complex. On the one hand, Europe must never again allow its will to be dictated by a superpower and must become autonomous in the exercise of its power. That implies full decision-making autonomy. On the other hand, an obsession with autonomy fails to do justice to geopolitical reality and may even reduce Europe’s sphere of influence.
After all, global developments have a direct impact on the well-being of Europeans through trade, innovation, regulation, war, conflict, terrorism, international organisations, cultural expressions and online interaction. Europe should therefore do everything in its power to expand its sphere of influence, both directly and indirectly – not least to strengthen and protect its rule-setting power.
In the same boat
In this respect, the emergence of the multipolar world order offers the EU a golden opportunity. Intensifying cooperation with global middle powers offers the world the only alternative to American and Chinese dominance. Whilst China’s drive for expansion is meeting with considerable resistance from virtually all its neighbours, America is rapidly losing allies across the globe due to its aggressive course. The EU can step into this gap. In fact, this constitutes The Third Way, which has strategic interdependence between middle powers as its goal.
In this way, thanks to its economic scale, Europe can become an architect of the multipolar world order.
First and foremost, the nature of these relationships is attractive to the EU, as middle powers neither dominate nor wish to be dominated. The key candidates are democratic Australia, Brazil, Canada, India, Indonesia, Japan, Mexico, the UK and South Korea. With a combined annual GDP of just under €40 trillion, they can exert significant geopolitical influence. They also represent attractive partners for the Global South, which could potentially even take the wind out of China’s sails when it comes to cooperation with developing countries.
Shared geopolitical interests should bring these middle powers together in the long term. Mutual cooperation must therefore explicitly go beyond quick wins with adverse effects, such as the Azerbaijan–EU gas deal. High on the agenda are the development of a common security architecture, free trade routes, coordination on energy and climate policy, AI and social media regulation, and breaking away from the undesirable dominance of great powers. As far as I am concerned, we should add joint trade and tax policy to this list.
Coordination may well reduce our decision-making autonomy, but it can expand our sphere of influence in the rest of the world. Cooperation on the aforementioned issues creates a multiplier effect for our rule-setting power. Mutual dependence brings with it a balanced influence, which leaves strategic autonomy behind.
Forging closer geopolitical ties binds middle powers permanently to a common agenda – perhaps out of ideology, but certainly out of practical necessity. It is to the EU’s advantage that, through its trading position and by strengthening economic diversification in other countries, it can support democratisation.
This fits well with the EU’s raison d’être: economic integration leads to peace. An aggressive Russia is clearly undermining this principle. Nevertheless, a complete rejection of it is unjustified, given the global decline in warfare between states that trade with one another. Furthermore, I strongly suspect that the nature of trade and dependency relationships is decisive. An economy dominated by gas and oil is unlikely to become any more democratic, and is also more prone to military adventures. A plausible explanation for both is an autocratic regime with an economic model that can increasingly channel resources towards itself. Such relationships must be avoided, but more balanced trade relations can certainly lead to greater peace and perhaps even a spirit of mutual sacrifice.
From the formal to the informal
Finally, drawing on The Third Way, the EU can respond to the following three trends in multilateralism.
A relatively new trend in multilateralism is the shift from the formal and institutional to the informal – from organisations such as the UN, NATO, the World Bank, the WTO, the WHO and the IMF to looser cooperative frameworks such as the G20, 3+1 EastMed, PESCO, the SCO, the G7 and BRICS. Many emerging (middle) powers, in particular, may be tempted to explore new geopolitical partnerships and alliances, outside existing institutional frameworks and bypassing dominant powers. It may feel somewhat unfamiliar, but there is considerable geopolitical potential here for the EU.
Regionalisation
A second trend is regionalisation, which has gained momentum worldwide. Due to geographical realities, shared security risks and (shifting) trade flows, neighbouring countries are increasingly dependent on one another. This has led to a stronger regional focus and integration. As a pioneer, the EU has a great deal of experience with regional integration and can use the knowledge and expertise it has gained to assist other blocs.
The EU is often criticised for its slow decision-making process and for the fact that Kissinger was unsure who to call when he wanted to reach Europe. Less often highlighted, yet far more important, is the fact that the EU processes an unprecedented volume of information and balances competing interests when formulating policy. This is commendable in itself, but is in fact also essential in this information age and of great added value to all Member States. For me, as an expert in economic and public administration, this is the key factor in Europe’s success. It is a trump card waiting to be played by the EU.
Compartmentalisation
Thirdly, there is a tendency towards compartmentalisation in multilateralism – meaning that countries wish to cooperate in a very specific area, but this does not necessarily lead to broader or more intensive cooperation in other areas. Here, the spillover theory – which posits that cooperation in one area leads to spillovers into other areas – has lost some of its force.
The EU must learn to adopt a pragmatic, calculating and sometimes even transactional approach in this regard. This runs counter to the institutional logic that so characterises the EU, but is important in the new geopolitical reality. In some cases, the EU may adopt a pragmatic approach to this. In others, the EU must break the pattern of compartmentalisation and play hardball. In such instances, for example, European trade benefits and investments must be made conditional upon the imposition of sanctions on Russia, as well as broader geopolitical and security support.
Renewed multilateralism in the multipolar world order
Despite anti-globalist rhetoric and looming trade wars, there remains a promising future for various forms of multilateralism. Too many politicians hide behind multilateralism when they fail to keep their promises, but virtually all politicians realise that fulfilling their promises without multilateralism is doomed to failure. Withdrawing from multilateralism in a fragmenting world order comes at a high price, for both emerging and established powers.
For middle powers, this offers a way out of American and Chinese dominance. As the child of multilateralism, the EU must become The Third Way Pioneer.
It is time for Europe to replace America as the architect of the multipolar world order.
After all, there is only one America, and that is Europe.