BRUSSELS ― European governments and corporations are racing to reduce their exposure to U.S. technology, military hardware and energy resources as transatlantic relations sour.  For decades, the EU relied on NATO guarantees to ensure security in the bloc, and on American technology to power its business. Donald Trump’s threats to take over Greenland, and aggressive comments about Europe by members of his administration, have given fresh impetus to European leaders’ call for “independence.” “If we want to be taken seriously again, we will have to learn the language of power politics,” German Chancellor Friedrich Merz said last week. From orders banning civil servants from using U.S.-based videoconferencing tools to trade deals with countries like India to a push to diversify Europe’s energy suppliers, efforts to minimize European dependence on the U.S. are gathering pace. EU leaders warn that transatlantic relations are unlikely to return to the pre-Trump status quo. EU officials stress that such measures amount to “de-risking” Europe’s relationship with the U.S., rather than “decoupling” — a term that implies a clean break in economic and strategic ties. Until recently, both expressions were mainly applied to European efforts to reduce dependence on China. Now, they are coming up in relation to the U.S., Europe’s main trade partner and security benefactor. The decoupling drive is in its infancy. The U.S. remains by far the largest trading partner for Europe, and it will take years for the bloc to wean itself off American tech and military support, according to Jean-Luc Demarty, who was in charge of the European Commission’s trade department under the body’s former president, Jean-Claude Juncker. Donald Trump’s threats to take over Greenland, and aggressive comments about Europe by members of his administration, have given fresh impetus to European leaders’ call for “independence.” | Kristian Tuxen Ladegaard Berg/NurPhoto via Getty Images “In terms of trade, they [the U.S.] represent a significant share of our exports,” said Demarty. “So it’s a lot, but it’s not a matter of life and death.” The push to diversify away from the U.S. has seen Brussels strike trade deals with the Mercosur bloc of Latin American countries, India and Indonesia in recent months. The Commission also revamped its deal with Mexico, and revived stalled negotiations with Australia. DEFENDING EUROPE: FROM NATO TO THE EU Since the continent emerged from the ashes of World War II, Europe has relied for its security on NATO — which the U.S. contributes the bulk of funding to. At a weekend retreat in Zagreb, Croatia, conservative European leaders including Merz said it was time for the bloc to beef up its homegrown mutual-defense clause, which binds EU countries to an agreement to defend any EU country that comes under attack. While it has existed since 2009, the EU’s Article 42.7 mutual defense clause was rarely seen as necessary because NATO’s Article 5 served a similar purpose. But Europe’s governments have started to doubt whether the U.S. really would come to Europe’s rescue. In Zagreb, the leaders embraced the EU’s new role as a security actor, tasking two leaders, as yet unnamed, with rapidly cooking up plans to turn the EU clause from words to an ironclad security guarantee. “For decades, some countries said ‘We have NATO, why should we have parallel structures?’” said a senior EU diplomat who was granted anonymity to talk about confidential summit preparations. After Trump’s Greenland saber-rattling, “we are faced with the necessity, we have to set up military command structures within the EU.” At a weekend retreat in Zagreb, Croatia, conservative European leaders including Merz said it was time for the bloc to beef up its homegrown mutual-defense clause, which binds EU countries to an agreement to defend any EU country that comes under attack. | Marko Perkov/AFP via Getty Images In comments to EU lawmakers last week, NATO Secretary-General Mark Rutte said that anyone who believes Europe can defend itself without the U.S. should “keep on dreaming.” Europe remains heavily reliant on U.S. military capabilities, most notably in its support for Ukraine’s fight against Russia. But some Europeans are now openly talking about the price of reducing exposure to the U.S. — and saying it’s manageable. TECHNOLOGY: TEAMS OUT, VISIO IN The mood shift is clearest when it comes to technology, where European reliance on platforms such as X, Meta and Google has long troubled EU voters, as evidenced by broad support for the bloc’s tech legislation. French President Emmanuel Macron’s government is planning to ban officials from using U.S.-based videoconferencing tools. Other countries like Germany are contemplating similar moves. “It’s very clear that Europe is having our independence moment,” EU tech czar Henna Virkkunen told a POLITICO conference last week. “During the last year, everybody has really realized how important it is that we are not dependent on one country or one company when it comes to some very critical technologies.” France is moving to ban public officials from using American platforms including Google Meet, Zoom and Teams, a government spokesperson told POLITICO. Officials will soon make the switch to Visio, a videoconferencing tool that runs on infrastructure provided by French firm Outscale. In the European Parliament, lawmakers are urging its president, Roberta Metsola, to ditch U.S. software and hardware, as well as a U.S.-based travel booking tool. In Germany, politicians want a potential German or European substitute for software made by U.S. data analysis firm Palantir. “Such dependencies on key technologies are naturally a major problem,” Sebastian Fiedler, an SPD lawmaker and expert on policing, told POLITICO. Even in the Netherlands, among Europe’s more pro-American countries, there are growing calls from lawmakers and voters to ring-fence sensitive technologies from U.S. influence. Dutch lawmakers are reviewing a petition signed by 140,000 people calling on the state to block the acquisition of a state identity verification tool by a U.S. company. At the World Economic Forum in Davos, Switzerland, in late January, German entrepreneur Anna Zeiter announced the launch of a Europe-based social media platform called W that could rival Elon Musk’s X, which has faced fines for breaching the EU’s content moderation rules. W plans to host its data on “European servers owned by European companies” and limits its investors to Europeans, Zeiter told Euronews. So far, Brussels has yet to codify any such moves into law. But upcoming legislation on cloud and AI services are expected to send signals about the need to Europeanize the bloc’s tech offerings. ENERGY: TIME TO DIVERSIFY On energy, the same trend is apparent. The United States provides more than a quarter of the EU’s gas, a share set to rise further as a full ban on Russian imports takes effect. But EU officials warn about the risk of increasing Europe’s dependency on the U.S. in yet another area. Trump’s claims on Greenland were a “clear wake-up call” for the EU, showing that energy can no longer be seen in isolation from geopolitical trends, EU Energy Commissioner Dan Jørgensen said last Wednesday. The Greenland crisis reinforced concerns that the bloc risks “replacing one dependency with another,” said Jørgensen, adding that as a result, Brussels is stepping up efforts to diversify, deepening talks with alternative suppliers including Canada, Qatar and North African countries such as Algeria. FINANCE: MOVING TO EUROPEAN PAYMENTS Payment systems are also drawing scrutiny, with lawmakers warning about over-reliance on U.S. payment systems such as Mastercard and Visa. The digital euro, a digital version of cash that the European Central Bank is preparing to issue in 2029, aims to cut these dependencies and provide a pan-European sovereign means of payment. “With the digital euro, Europeans would remain in control of their money, their choices and their future,” ECB President Christine Lagarde said last year. In Germany, some politicians are sounding the alarm about 1,236 tons of gold reserves that Germany keeps in the Federal Reserve Bank of New York. “In a time of growing global uncertainty and under President Trump’s unpredictable U.S. policy, it’s no longer acceptable” to have that much in gold reserves in the U.S., Marie-Agnes Strack-Zimmermann, the German politician from the liberal Free Democratic Party, who chairs the Parliament’s defense committee, told Der Spiegel. Several European countries are pushing the EU to privilege European manufacturers when it comes to spending EU public money via “Buy European” clauses. Until a few years ago, countries like Poland, the Netherlands or the Baltic states would never have agreed on such “Buy European” clauses. But even those countries are now backing calls to prioritize purchases from EU-based companies. MILITARY INVESTMENT: BOOSTING OWN CAPACITY A €150 billion EU program to help countries boost their defense investments, finalized in May of last year, states that no more than 35 percent of the components in a given purchase, by cost, should originate from outside the EU and partner states like Norway and Ukraine. The U.S. is not considered a partner country under the scheme. For now, European countries rely heavily on the U.S. for military enablers including surveillance and reconnaissance, intelligence, strategic lift, missile defense and space-based assets. But the powerful conservative umbrella group, the European People Party, says these are precisely the areas where Europe needs to ramp up its own capacities. When EU leaders from the EPP agreed on their 2026 roadmap in Zagreb, they stated that the “Buy European” principle should apply to an upcoming Commission proposal on joint procurement. The title of the EPP’s 2026 roadmap? “Time for independence.” Camille Gijs, Jacopo Barigazzi, Mathieu Pollet, Giovanna Faggionato, Eliza Gkritsi, Elena Giordano, Ben Munster and Sam Clark contributed reporting from Brussels. James Angelos contributed reporting from Berlin.

The Netherlands’ incoming government wants to push Europe toward a tighter intelligence-sharing club — including what it calls a potential “European equivalent” of the Five Eyes alliance — as part of a broader overhaul of its security services. The new coalition argues, in its governing plans published Friday, that rising threats require faster and more proactive intelligence agencies while preserving the country’s tradition of operating under strict rule-of-law safeguards. The proposals include boosting funding and digital infrastructure for the civilian intelligence agency (AIVD) and military intelligence service (MIVD), and strengthening the role of the national counterterrorism coordinator. At the European level, The Hague says it wants to intensify cooperation with a core group of like-minded countries, explicitly floating a continent-wide version of the “Five Eyes” intelligence partnership (which is made up of Australia, Canada, New Zealand, the U.K., and the U.S.). In October, the heads of the two Dutch agencies announced they would stop sharing certain information with their U.S. counterparts, citing political interference and human rights concerns. Instead they would look at increasing cooperation with other European services, like the U.K., Poland, France, Germany and the Nordic countries. Domestically, the government plans to fast-track a revamped Intelligence and Security Services Act, rewriting the law to focus on threats rather than specific investigative tools and making it “technology-neutral” so agencies are not outpaced by innovation. Supervisory bodies would be merged to provide streamlined, but legally robust, oversight. The agenda also calls for expanding the operational research capacity of Dutch intelligence services to help build Europe’s “strategic autonomy,” while deepening ties with tech firms and recruiting top technical talent.

BRUSSELS — The European Commission’s vice president Henna Virkkunen sounded the alarm about Europe’s dependence on foreign technology on Tuesday, saying “it’s very clear that Europe is having our independence moment.” “During the last year, everybody has really realized how important it is that we are not dependent on one country or one company when it comes to some very critical technologies,” she said at an event organized by POLITICO. “In these times … dependencies, they can be weaponized against us,” Virkkunen said. The intervention at the event — titled Europe’s race for digital leadership — comes at a particularly sensitive time in transatlantic relations, after U.S. President Donald Trump’s recent threats to take over Greenland forced European politicians to consider retaliation. Virkkunen declined to single out the United States as one of the partners that the EU must de-risk from. She pointed to the Covid-19 pandemic and Russia’s invasion of Ukraine as incidents that point to Europe’s “vulnerabilities.” She said the U.S. is a key partner, but also noted that “it’s very important for our competitiveness and for our security, that we have also our own capacity, that we are not dependent.” The Commission’s executive vice president for tech sovereignty swung behind the idea of using public contracts as a way to support the development of European technology companies and products. “We should use public procurement, of course, much more actively also to boost our own growing technologies in the European Union,” she said when asked about her stance on plans to “Buy European.” Those plans, being pushed by the French EU commissioner Stéphane Séjourné, in charge of European industy, to ensure that billions in procurement contracts flow to EU businesses, are due to be outlined in an upcoming Industrial Accelerator Act that has been delayed multiple times. “Public services, governments, municipalities, regions, also the European Commission, we are very big customers for ICT services,” Virkkunen said. “And we can also boost very much European innovations [and startups] when we are buying services.” Virkkunen is overseeing a package of legislation aimed at promoting tech sovereignty that is expected to come out this spring, including action on cloud and artificial intelligence, and microchips — industries in which Europe is behind global competitors. When asked where she saw the biggest need for Europe to break away from foreign reliance, the commissioner said that while it was difficult to pick only one area, “chips are very much a pre-condition for any other technologies.” “We are not able to design and manufacture very advanced chips. It’s very problematic for our technology customer. So I see that semiconductor chips, they are very much key for any other technologies,” she said.

BRUSSELS — Pressure is mounting on the European Commission to exempt fertilizers from its new carbon tariff scheme, as national capitals side with farmers over industry to unpick one of the EU’s newest climate policies. During a discussion requested by Austria on Monday, 12 countries called for a temporary exclusion of fertilizers from the European Union’s carbon border adjustment mechanism (CBAM), a levy on the greenhouse gas emissions of certain goods imported into the bloc. They argued that CBAM, which only became fully operational on Jan. 1, is sending already-rising fertilizer even higher, adding to economic difficulties for crop farmers. “European arable farmers are currently facing not just low producer prices, but also rising production costs. The main cost drivers are fertilizer prices, which have increased markedly since 2020,” Johannes Frankhauser, a senior official in Austria’s agriculture ministry, told ministers gathered in Brussels. Eleven countries backed Vienna in Monday’s meeting. Yet critics — which include fertilizer producers, environment-focused MEPs and several governments — warn that such an exemption would not only penalize the EU’s domestic producers but threaten the integrity of the carbon tariff scheme. “High prices of production inputs, including fertilizers, have a direct impact on the economic situation of farms… However, we want an optimal solution in order to maintain food security on one hand and on the other [avoid] possible negative impacts on the competitiveness of EU fertilizer producers,” said Polish Agriculture Minister Stefan Krajewski, whose country is a major fertilizer producer.  Germany, Belgium, Finland, Sweden and the Netherlands expressed similar sentiments.  CBAM was phased in over several years and is supposed to protect European producers of heavily polluting goods — cement, iron, steel, aluminum, fertilizers, electricity and hydrogen — from cheap and dirty foreign competition. EU manufacturers of these products currently pay a carbon price on their planet-warming emissions, while importers didn’t before the CBAM came into force. By introducing a levy on imports from countries without carbon pricing, the EU wants to even out the playing field and encourage its trading partners to switch to cleaner manufacturing practices. (Those partners aren’t too happy.) The CBAM price is paid by the importers, which are free to pass on the cost to buyers — in the case of fertilizers, farmers.  Fertilizers make up a substantial share of farms’ operating costs, and EU-based companies do not produce enough to match demand. CBAM is therefore expected to push up fertilizer costs, though estimates on by how much vary greatly. A group of nine EU countries led by France mentioned a 25 percent increase in a recent missive, while Austria reckons it’s 10-15 percent.  The main cost drivers are fertilizer prices, which have increased markedly since 2020,” Johannes Frankhauser, a senior official in Austria’s agriculture ministry, told ministers gathered in Brussels. | Olivier Hoslet/EPA Carbon pricing analyst firm Sandbag, however, says it’s far lower for the next two years — less than 1 percent, or a couple of euros per ton of ammonia, a fertilizer component that costs several hundred euros per ton without the levy. Responding to governments on Monday, Agriculture Commissioner Christophe Hansen noted that the EU executive already tweaked the policy to provide relief to farmers in December, and followed up in January with a promise to suspend some regular tariffs on fertilizer components to offset the additional CBAM cost. SUSPENSION SUSPENSE The Commission in December set in motion legislative changes that could allow it to enact such a suspension in the event of “serious and unforeseen circumstances” harming the bloc’s internal market — in effect, an emergency brake for CBAM. The suspension can apply retroactively, the EU executive said earlier this month. Yet EU governments and the European Parliament each have to approve this clause before the Commission could make such a move, a process expected to take the better part of this year. Environment ministers can vote on the changes in March or June, and MEPs haven’t even chosen their lead lawmakers to work on the Parliament’s position yet. That’s why Austria on Monday called on the Commission to “immediately” suspend CBAM until “the regular possibility to temporarily suspend CBAM on fertilisers is ensured.” The legal basis for such a move is unclear, as the legislation in force does not feature an exemption clause.  Vienna’s request for a debate came after a group of nine countries — Bulgaria, Croatia, France, Greece, Hungary, Latvia, Luxembourg, Portugal and Romania — wrote to the Commission requesting a suspension earlier this month. During Monday’s discussion, Croatia and Estonia also expressed support for such a move.  Ireland welcomed the Commission’s proposal of a suspension clause but asked for additional details.  Spain was ambivalent: “We need to strengthen our industrial capacity to contribute to the strategic autonomy of the European Union. But clearly, the decarbonisation of this sector mustn’t jeopardize farmers’ livelihoods,” said Spanish Agriculture Minister Luis Planas.  Italy, which previously signaled its support for a suspension, did not explicitly endorse such a move — merely backing the Commission’s already-announced tweaks to normal fertilizer tariffs in its intervention on Monday.  Not all countries took to the floor. Czechia, for example — whose new government is opposed to large parts of EU climate legislation, but whose prime minister owns Europe’s second-largest nitrogen fertilizer producer — remained silent. The Czech agriculture ministry did not respond to a request for comment. INDUSTRY ALARMED While exempting fertilizers may win governments kudos from farmers, European fertilizer manufacturers would be irate. The producers’ association Fertilisers Europe warned that such a move would be “totally unacceptable” and “undermine the competitiveness” of EU companies. Yara, a major Norwegian fertilizer producer, said that “CBAM was designed to ensure a level playing field. Weakening it through tariff reductions or retroactive suspension sends the wrong signal to companies investing in Europe’s green transition.” Mohammed Chahim, the vice president of the center-left Socialists and Democrats in the European Parliament, said that EU companies “need regulatory stability.” “European fertilizer producers have spent precious time and significant resources, often with support from taxpayer money, to decarbonize,” said the Dutch MEP, who drafted the Parliament’s position on the original CBAM law. “Any exemptions for CBAM send a terrible signal — not just to our own industry, but to the world.”  It’s not only makers of fertilizer that are up in arms. Companies in the heavy industry sector — whose competitiveness CBAM is supposed to protect — are warning that granting an exemption once could produce a domino effect, encouraging buyers of all CBAM goods to lobby for relief.  German MEP Peter Liese, environment coordinator of the center-right European People’s Party, said earlier this month that a retroactive exemption would be “theoretically possible” but that he was “very much against it because I believe that if we start doing that, we will end up in a cascade. | Ronald Wittek/EPA “Once one sector gets an exemption, other sectors will want this too,” warned the Business for CBAM coalition, a lobby group of companies and industry groups. “We therefore call on the European Parliament and [ministers] to remove” the exemption clause, it added.  Similarly, German MEP Peter Liese, environment coordinator of the center-right European People’s Party, said earlier this month that a retroactive exemption would be “theoretically possible” but that he was “very much against it because I believe that if we start doing that, we will end up in a cascade. If we suspend it for fertilizers, there are immediately arguments to suspend it in other sectors as well.” 

BRUSSELS — Only a few days ago, EU diplomats and officials were whispering furtively about the idea they might one day need to think about how to push back against Donald Trump. They’re not whispering anymore.  Trump’s attempt, as EU leaders saw it, to “blackmail” them with the threat of tariffs into letting him take the sovereign Danish island of Greenland provoked a howl of outrage — and changed the world.  Previous emergency summits in Brussels focused on existential risks to the European Union, like the eurozone crisis, Brexit, the coronavirus pandemic, and Russia’s invasion of Ukraine. This week, the EU’s 27 leaders cleared their diaries to discuss the assault they faced from America.  There can be little doubt that the transatlantic alliance has now been fundamentally transformed from a solid foundation for international law and order into a far looser arrangement in which neither side can be sure of the other.  “Trust was always the foundation for our relations with the United States,” said Polish Prime Minister Donald Tusk as he arrived for the summit in Brussels on Thursday night. “We respected and accepted American leadership. But what we need today in our politics is trust and respect among all partners here, not domination and for sure not coercion. It doesn’t work in our world.”  The catalyst for the rupture in transatlantic relations was the U.S. president’s announcement on Saturday that he would hit eight European countries with tariffs of 10 percent for opposing his demand to annex Greenland.  That was just the start. In an avalanche of pressure, he then canceled his support for the U.K. premier’s decision to hand over the Chagos Islands, home to an important air base, to Mauritius; threatened France with tariffs on Champagne after Macron snubbed his Board of Peace initiative; slapped down the Norwegian prime minister over a Nobel Peace Prize; and ultimately dropped his threats both to take Greenland by military force and to hit countries that oppose him with tariffs.  Here was a leader, it seemed to many watching EU officials, so wild and unpredictable that he couldn’t even remain true to his own words.  But what dismayed the professional political class in Brussels and beyond was more mundane: Trump’s decision to leak the private text messages he’d received directly from other world leaders by publishing them to his 11.6 million followers on social media.  Trump’s screenshots of his phone revealed French President Emmanuel Macron offering to host a G7 meeting in Paris, and to invite the Russians in the sidelines. NATO Secretary-General Mark Rutte, who once called Trump “daddy,” also found his private text to Trump made public, in which he praised the president’s “incredible” achievements, adding: “Can’t wait to see you.”  Leaking private messages “is not acceptable — you just don’t do it,” said one senior diplomat, like others, on condition of anonymity because the matter is sensitive. “It’s so important. After this, no one can trust him. If you were any leader you wouldn’t tell him anything. And this is a crucial means of communication because it is quick and direct. Now everything will go through layers of bureaucracy.”  Mark Carney had been one of the classic Davos set and was a regular attendee: suave, a little smug, and seeming entirely comfortable among snow-covered peaks and even loftier clientele. | Gian Ehrenzeller/EPA The value of direct contact through phone texts is well known to the leaders of Europe, who, as POLITICO revealed, have even set up their own private group chat to discuss how to respond when Trump does something inflammatory. Such messages enable ministers and officials at all levels to coordinate solutions before public statements have to be made, the same senior diplomat said. “If you don’t have trust, you can’t work together anymore.”  NO MORE NATO Diplomats and officials now fear the breakdown in personal trust between European leaders and Trump has potentially grave ramifications.  Take NATO. The military alliance is, at its core, a promise: that member countries will back each other up and rally to their defense if one of them comes under attack. Once that promise looks less than solid, the power of NATO to deter attacks is severely undermined. That’s why Denmark’s Prime Minister Mette Frederiksen warned that if Trump invaded the sovereign Danish territory of Greenland it would be the end of NATO.  The fact he threatened to do so has already put the alliance into intensive care, another diplomat said.  Asked directly if she could still trust the U.S. as she arrived at the Brussels summit, Frederiksen declined to say yes. “We have been working very closely with the United States for many years,” she replied. “But we have to work together respectfully, without threatening each other.”  European leaders now face two tasks: To bring the focus back to the short-term priorities of peace in Ukraine and resolving tensions over Greenland; and then to turn their attention to mapping out a strategy for navigating a very different world. The question of trust, again, underpins both.  When it comes to Ukraine, European leaders like Macron, Germany’s Friedrich Merz and the U.K.’s Keir Starmer have spent endless hours trying to persuade Trump and his team that providing Kyiv with an American military element underpinning security guarantees is the only way to deter Russian President Vladimir Putin from attacking again in future.  Given how unreliable Trump has been as an ally to Europe, officials are now privately asking what those guarantees are really worth. Why would Russia take America’s word seriously? Why not, in a year or two, test it to make sure?  THE POST-DAVOS WORLD Then there’s the realignment of the entire international system.  There was something ironic about the setting for Trump’s assaults on the established world order, and about the identities of those who found themselves the harbingers of its end.  Among the snow-covered slopes of the Swiss resort of Davos, the world’s business and political elite gather each year to polish their networks, promote their products, brag about their successes, and party hard. The super rich, and the occasional president, generally arrive by helicopter.  As a central bank governor, Mark Carney had been one of the classic Davos set and was a regular attendee: suave, a little smug, and seeming entirely comfortable among snow-covered peaks and even loftier clientele.  Now prime minister of Canada, this sage of the centrist liberal orthodoxy had a shocking insight to share with his tribe: “Today,” Carney began this week, “I’ll talk about the rupture in the world order, the end of a nice story, and the beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints.”  “The rules-based order is fading,” he intoned, to be replaced by a world of “great power rivalry” in which “the strong do what they can, and the weak suffer what they must.”  “The old order is not coming back. We should not mourn it. Nostalgia is not a strategy.”  Carney impressed those European officials watching. He even quoted Finnish President Alexander Stubb, who has enjoyed outsized influence in recent months due to the connections he forged with Trump on the golf course.  NATO Secretary-General Mark Rutte, who once called Donald Trump “daddy,” also found his private text to Donald Trump made public, in which he praised the president’s “incredible” achievements, adding: “Can’t wait to see you.” |  Jim lo Scalzo/EPA Ultimately, Carney had a message for what he termed “middle powers” — countries like Canada. They could, he argued, retreat into isolation, building up their defenses against a hard and lawless world. Or they could build something “better, stronger and more just” by working together, and diversifying their alliances. Canada, another target of Trump’s territorial ambitions, has just signed a major partnership agreement with China. As they prepared for the summit in Brussels, European diplomats and officials contemplated the same questions. One official framed the new reality as the “post-Davos” world. “Now that the trust has gone, it’s not coming back,” another diplomat said. “I feel the world has changed fundamentally.”  A GOOD CRISIS It will be up to European Commission President Ursula von der Leyen and her team to devise ways to push the continent toward greater self-sufficiency, a state that Macron has called “strategic autonomy,” the diplomat said. This should cover energy, where the EU has now become reliant on imports of American gas.  The most urgent task is to reimagine a future for European defense that does not rely on NATO, the diplomat said. Already, there are many ideas in the air. These include a European Security Council, which would have the nuclear-armed non-EU U.K. as a member. Urgent efforts will be needed to create a drone industry and to boost air defenses.  The European Commission has already proposed a 100,000-strong standing EU army, so why not an elite special forces division as well? The Commission’s officials are world experts at designing common standards for manufacturing, which leaves them well suited to the task of integrating the patchwork of weapons systems used by EU countries, the same diplomat said.  Yet there is also a risk. Some officials fear that with Trump’s having backed down and a solution to the Greenland crisis now apparently much closer, EU leaders will lose the focus and clarity about the need for change they gained this past week. In a phrase often attributed to Churchill, the risk is that EU countries will “let a good crisis go to waste.”  Domestic political considerations will inevitably make it harder for national governments to commit funding to shared EU defense projects. As hard-right populism grows in major regional economies, like France, the U.K. and Germany, making the case for “more Europe” is harder than ever for the likes of Macron, Starmer and Merz. Even if NATO is in trouble, selling a European army will be tough.  While these leaders know they can no longer trust Trump’s America with Europe’s security, many of them lack the trust of their own voters to do what might be required instead. 

BRUSSELS ― There’s no turning back now. That was the message from European leaders who gathered in Brussels on Thursday. And even though this emergency summit, called in response to Donald Trump’s threats to seize Greenland, turned into something far less dramatic because the U.S. president backed down 24 hours earlier, the quiet realization that Europe’s post-1945 rubicon had been crossed was, if anything, all the more striking for it. French President Emmanuel Macron and German Chancellor Friedrich Merz, the EU’s two most powerful leaders, who haven’t seen eye-to-eye of late, were united in warning that the transatlantic crisis had catapulted the bloc into a harsh new reality — one in which it must embrace independence. “We know we have to work as an independent Europe,” European Commission President Ursula von der Leyen told reporters at the end of the five-hour gathering. And while, in contrast to recent EU summits, there was no tub-thumping or quarrels or even any decisions to be made, the gathering quietly signaled a tacit understanding, according to four EU diplomats and one official with knowledge of the leaders’ discussion, that there’s a fateful break between the old order and the new, the way the West has functioned since World War II and whatever lies ahead. While the mental shift toward independence has been gestating for years ― ever since Trump first moved into the White House in 2017 ― his unprecedented threats to Greenland acted as a sudden warning, forcing them to take steps that would have been unthinkable even just a few months ago, they said. All the officials interviewed for this article were granted anonymity to enable them to speak freely about the summit, which was held in private. “This is the Rubicon moment,” said an EU diplomat from an eastern flank country, with knowledge of the leaders’ discussions. “It’s shock therapy. Europe cannot go back to the way it was before. They [the leaders] have been saying this for days.” What that new way would look like is — as usual — a conversation for another day. But there have been hints at it this week. The initial response from EU leaders to the Greenland crisis — suspending an EU-U.S. trade agreement, sending troops to Greenland, threatening to deploy sweeping trade retaliation against the U.S. — served as a taste of what might come. EVERYTHING, ALL AT ONCE Between them, and then in public, leaders underscored that the speedy, unified response this month couldn’t be a one-off. Instead, it would need to define the bloc’s approach to just about everything “It cannot be energy security or defense, it cannot be economic strength or trade dependence, it has to be everything, all at once,” one of the diplomats said. France’s President Emmanuel Macron arrives for the summit. France is no longer an outlier in advocating for “strategic autonomy” for Europe. | Olivier Matthys/ EPA A key feature of Europe’s newfound quest for independence is a degree of unity that has long eluded the bloc. For countries on the bloc’s eastern flank, their location in the path of an expansionist Russia has long underpinned a quasi-religious belief in NATO ― in which a reliable U.S. had the biggest military and guaranteed the defense of all other members ― and its ability to deter Moscow. A sense of existential reliance on the U.S. has kept these countries firmly in Washington’s camp, leading to disagreements with countries further west, like France, that advocate “strategic autonomy” for Europe. Now, France isn’t the outlier. Even countries directly exposed to Russia’s expansionism are showing willingness to get on board with the independence push. Estonia is a case in point. The tiny Baltic country said last week it would consider deploying troops to Greenland as part of a “scoping mission” organized by NATO. Tallinn didn’t end up sending any soldiers — but the mere fact that it raised the possibility was remarkable. “When Europe is not divided, when we stand together, and when we are clear and strong, also in our willingness to stand up for ourselves, then results will show,” Danish Prime Minister Mette Frederiksen said. “I think we have learned something in the last days and weeks.” Poland, one of the staunchest U.S. backers, also stepped out of its traditional comfort zone. In discussions about how to respond, Prime Minister Donald Tusk has signaled openness to deploying the EU’s Anti-Coercion Instrument — a powerful trade retaliation tool that allows for limiting investments from threatening nations, according to the diplomats. Poland’s Prime Minister Donald Tusk speaks to the media as he arrives for the summit. Even Poland, one of the staunchers backers of the U.S., has stepped out of its comfort zone. | Olivier Matthys/EPA “We always respected and accepted American leadership,” Tusk said. “But what we need today in our politics is trust and respect among our partners here, not domination and not coercion. It doesn’t work.” LEARNING THE LESSON A similar realization is taking hold in Europe’s free-trading northern countries.  While nations like Denmark, Sweden and the Netherlands have historically opposed any move that risks imperiling their trading relationship with the U.S., those countries also signaled openness to retaliation against Trump. “This is a new era where we’re not going to rely on them anymore,” said a fourth EU diplomat. “At least not for three years,” while Trump is still in office. “This [Greenland crisis] was a test. We’ve learned the lesson.” Even Germany, whose political culture has been defined for decades by faith in the transatlantic relationship, is questioning old assumptions. Merz has hinted that Germany could be onboard with a tough trade response against the U.S. While EU diplomats and officials credited those moves with helping to change Trump’s mind on his tariff threats, they warned that further tough choices were now in order. “We need to own our agenda,” added the fourth diplomat. “Ukraine, productivity, competitiveness, security, strategic autonomy. The lesson is not to say no to everything.” Tim Ross, Zoya Sheftalovich, Seb Starcevic, Victor Jack, Nette Nöstlinger, Ferdinand Knapp, Jacopo Barigazzi, Carlo Martuscelli, Ben Munster, Camille Gijs, Gerardo Fortuna, Jakob Weizman, Bartosz Brzeziński, Gabriel Gavin and Giedre Peseckyte contributed reporting.

STRASBOURG — Germany, the chief backer of the European Union’s Mercosur trade deal, called on Brussels to go ahead and implement it even after lawmakers voted on Wednesday to send the accord for judicial review, setting up a major clash between the bloc’s institutions and its two largest economies. The European Parliament voted by a razor-thin margin on Wednesday to pass a motion to seek a legal opinion from the Court of Justice of the EU on whether the Mercosur deal complies with the EU treaties. It was a blow for Commission chief Ursula von der Leyen, who made a last-minute appeal hours earlier to MEPs to advance the deal. The vote widened a rift between France, which has fought an epic rearguard action against the Latin American megadeal to protect its farmers, and a Germany desperate to boost industrial exporters reeling from U.S. President Donald Trump’s trade aggression. “The European Parliament’s decision on the Mercosur Agreement is regrettable,” German Chancellor Friedrich Merz said on X. “It misjudges the geopolitical situation. We are convinced of the agreement’s legality. No more delays. The agreement must now be applied provisionally.” In Paris, Prime Minister Sébastien Lecornu welcomed what he called “an important vote that has to be respected.” Foreign Minister Jean Noël Barrot chimed in: “France takes responsibility for saying no when it is necessary, and history often proves it right. The fight continues to protect our agriculture and ensure our food sovereignty.” Lawmakers will not vote on final consent to the deal until the Court of Justice issues its opinion, which could take 18 to 24 months. The court can “adjust the pace of the proceedings where institutional or political necessity makes a timely response especially important,” its press service said in a statement. DEMOCRACY VS REALPOLITIK In principle, the Commission would be allowed under the EU treaties to temporarily apply the provisions of the Mercosur deal, which would create a free-trade area spanning 700 million people and eliminate duties on more than 90 percent of goods. It’s a finely balanced, yet momentous, tradeoff between democratic accountability and realpolitik as the EU executive seeks ways to stand strong against Washington amidst the ongoing transatlantic rift over President Donald Trump’s threats to annex Greenland. Manfred Weber, the pro-Mercosur leader of the European People’s Party, backed the call by his fellow countryman Merz, for provisional application. “The European Parliament did not take a substantive position on Mercosur today; it voted on a procedural motion instead. This is an attempt to delay a much-needed agreement for ideological reasons,” Weber said in a statement. “In the current geopolitical situation, Europe cannot afford a stalemate. The agreement must now be provisionally applied so that its benefits for our economy can take effect. The European Parliament will have the final say after review by the Court of Justice of the EU.” The Commission, in a strongly worded statement, said it “strongly regretted” the decision by EU lawmakers, calling the concerns raised in the motion “unjustified.” It did not precommit to taking any action, however, saying it would now engage with EU member governments and MEPs before deciding on next steps. Olof Gill, the Commission’s top trade spokesperson, did confirm to reporters last week that the EU treaties did allow for the possibility of provisional implementation.  EU countries withdrew a resolution pledging not to sidestep the legislative process when they backed the deal on Jan. 9, sparking uproar in the corridors of the Parliament.  POWER PLAY Lawmakers argue that the Parliament, as the EU’s only directly elected institution, has the democratic legitimacy to be involved in decisions on trade deals.  A new non-binding framework agreement governing relations between the Commission and the Parliament, still to be green-lit by lawmakers, states that if the Commission intends to pursue provisional application of the deal, it should first seek the Parliament’s consent. The move to bypass Parliament would also mark a departure from established practice. Although it’s possible to provisionally apply the trade deal before the European Parliament’s consent, it hasn’t been the practice for over 10 years.  “Provisional application doesn’t take effect before the consent of the European Parliament or before the European Parliament has had the chance to express its view — and that is standard practice since the EU-South Korea agreement [in 2011],” said David Kleimann, a senior trade expert.  Even if the Commission wants to expedite implementation of the deal, it will need to wait until the Mercosur countries ratify the agreement, Sabine Weyand said in an email sent to trade lawmakers less than two weeks ago, seen by POLITICO. “On the side of the Commission we very much wish the Mercosur agreement to become a reality as quickly as possible, given its importance for the EU’s strategic autonomy and sovereignty,” she said. Asking for the Parliament’s “swift consent” on the deal as a whole, she reminded lawmakers that Mercosur countries “need to have completed their respective ratification procedures, and then notify the other side thereof” before the Commission can implement the deal in Europe.  Max Griera reported from Strasbourg and Camille Gijs from Brussels. Giorgio Leali contributed to this report from Paris and Ferdinand Knapp from Brussels.

Europe is laying the foundation for renewed economic growth. Regulatory simplification is gaining traction. Public investment is accelerating in technology, energy and defense. Private capital is supplementing these efforts. These are meaningful steps, which, in the eyes of many, are long overdue and still need to gain pace. But an additional ingredient is required.  Our new research finds that closing the continent’s competitiveness gap requires Europe’s major companies to place a new emphasis on entrepreneurial courage: that is, the increased willingness to embrace uncertainty and take calculated risks in service of renewal and growth. Corporate leaders willing to make bold investments and engage in modern public-private collaborations, much like their American and Asian peers, stand to reap the rewards for acting decisively and with greater urgency.   Europe’s global competitiveness is ultimately a function of individual companies making a material difference, particularly large corporations and dynamic scale-ups. And it doesn’t require many acting boldly to have a disproportionate impact. In examining a sample representing about 15 percent of the U.S. economy, the McKinsey Global Institute found that more than two-thirds of productivity growth between 2011 and 2019 was driven by just 44 ‘standout’ companies. Meanwhile, 13 standout companies drove a similar proportion of the German sample’s productivity growth during the same period. These highly valued ‘outliers’, together with differences in growth and return on invested capital, underpin much of the valuation gap between European companies and their international peers, as highlighted in research we conducted on UK capital markets.   The status quo is not tenable.  Since the global financial crisis, Europe has endured a prolonged slump in private investment that has been especially pronounced in future-shaping industries. In the past five years alone, our analysis found that companies with headquarters in the United States have invested €2 trillion more in digital technologies such as artificial intelligence (AI) than their European peers. And in traditional manufacturing industries, China is out-investing Europe at a rate of 3:1.  > This investment gap not only stifles European economic growth, but prevents > the continent from inventing, developing and deploying the technologies it > needs to increase productivity and drive prosperity.  And the need to boost investments is growing: when the landmark Draghi report on European competitiveness was released in 2024, it estimated that an additional €800 billion needed to be mobilized annually to start closing the continent’s competitiveness gap. With the required additional investment in defense, that figure is now estimated to be €1.2 trillion annually for the next five years.  Of course, the regulatory landscape is also important. The positive news over the past year is that the European Commission has implemented dozens of initiatives, from regulatory simplification to streamlining and enhancing funding and market-creation mechanisms, as well as preparing to propose a ‘28th regime’ to make it easier for companies to scale across its 27 member states. Governments are also stepping up, with growth in strategic public investment in technology, energy and defense capabilities creating tailwinds for private investment. For instance, Germany amended its constitution to exempt defense spending above 1 percent of GDP from its debt brake and established a €500 billion fund to support infrastructure and climate-neutral investment. Similar programs are taking shape in France, Italy, the Netherlands and the Nordics.  But, while private sector activity shows some signs of acceleration, more is needed. Driving Europe’s economic vitality requires the emergence of standout companies, acting both individually and in close collaboration with the public sector. Without it, Europe risks another decade of ‘secular stagnation’: sluggish real GDP growth of around 1 percent annually as excess savings and a dearth of investment depress aggregate demand and push interest rates back to near zero.  > So, what does it take to show more entrepreneurial courage? Informed by our > global research and what we see standout firms doing, our research highlights > a range of actions leaders could explore.  One example is making broader ecosystem plays, such as semiconductor company ASML joining with the Dutch government and regional partners to launch Project Beethoven, a €2.5 billion public-private investment to ensure ASML’s continued presence and expansion of the broader microchip cluster in Eindhoven. Another is re-inventing potential stranded assets to position them for the industries of the future, illustrated by the range of European utilities converting or marketing former coal and gas power plant sites for hyperscale data centers. And a clear one is radical adoption of AI and automation technologies, which MGI’s research shows could add up to 3.4 percentage points to annual productivity growth globally through 2040.  > Europe has an opportunity to take steps to decisively alter its competitive > trajectory.  But while public sector leaders can lay the foundations necessary to accelerate investment and growth, the continent’s leading companies are distinctly positioned to amplify this and make a critical contribution to the continent’s prosperity, security and strategic autonomy. There’s growing consensus on what needs to be done. What’s now needed is a hefty dose of entrepreneurial courage to act.

PARIS — Just as Europe needs its Franco-German power couple to unite to tackle U.S. President Donald Trump’s growing menace to Greenland, relations between Paris and Berlin are under strain. German Chancellor Friedrich Merz is vowing to form a joint front with his French counterpart Emmanuel Macron in the coming days — revving up the cross-Rhine alliance often described as the engine of the EU — to secure a breakthrough with Trump. But building what Merz calls a “common position” with Macron won’t come easy. Both sides will need to put aside months of frustration, suspicion and bad blood. French diplomats are worried by Berlin’s increasing assertiveness in styling itself as Europe’s dominant player, while the Germans are fed up with the French over a stalled joint fighter-jet program, their opposition to an EU-Mercosur trade deal, and a shelved plan to use Russian assets to finance aid for Ukraine. The contrast between the French and German leaders in their approach to Trump was also on full display in their response to the U.S. president’s threat on Saturday to impose tariffs on EU countries that opposed his takeover of Greenland. Macron, who often draws on a pugnacious Gaullist tradition of seeking greater independence from the U.S., immediately vowed to punch back hard against Trump with the EU’s trade arsenal. The more emollient Merz, an avowed Atlanticist, played up the prospect of talking the U.S. president back from the brink. Merz on Monday publicly acknowledged that Germany differed markedly on tone with France, which “wanted to react a little more harshly than we do” because Paris was less exposed to the onslaught of an all-out trade war with the U.S. For the French, one infuriating obstacle to a unified position with Berlin is that Germany’s coalition government is internally divided in its views. While Macron is raising the prospect of using the EU’s trade “bazooka” — the Anti-Coercion Instrument — to retaliate against Trump, Germany’s position is a muddle. “Different German politicians are saying different things,” complained one European diplomat. “If you listen to Germany’s finance minister, he says we should do it,” he added, referring to Lars Klingbeil’s support for Macron’s approach. Others, including Germany’s foreign minister, then sounded considerably less enthusiastic, the diplomat continued, after “their ambassador told colleagues just days ago [the bazooka] should be on the table.” While Merz is confident he can align with Macron this week to tackle the crisis created by Trump, the difficulties plaguing Germany’s relationship with France run deeper and will likely take far longer to fix. “In the last six months, the Franco-German engine hasn’t produced a single thing,” said one EU official who was granted anonymity, like others in this piece, to speak candidly about the bloc’s most important relationship. SHIFTING BALANCE OF POWER Paris has long wanted Germany to play a more ambitious role in supporting France’s grand ambitions for Europe, but Berlin is now flexing more diplomatic muscle than France expected. Germany is on track to build up a far bigger army than its neighbor, and is expected to be the only EU economy in the global top 10 by 2050. While Macron is hamstrung at home by massive public debt and government instability, Merz has increasingly been putting himself on the front line of European politics. He burnished his credentials on Ukraine as the top negotiator during a summit in Berlin late last year, which saw progress on security guarantees between Ukraine and the U.S.   Merz has also sought a leading role in conversations with Trump, even though he hasn’t always appeared as a model European in doing so. He told reporters that if the U.S. president “can’t get along with Europe,” he can “at least make Germany [his] partner.” The implication Berlin could go it alone is hardly music to French ears. “Germany is much more vocal, Merz wants to be comfortable with a more political role,” said a second European diplomat. “And it is upsetting the French.” To the Germans, the French talk a good game on big European projects but don’t live up to the hype. Berlin is irritated that Paris promotes diversification from the U.S. but then tried to block a landmark trade deal with South America. It is also annoyed that France seeks a leadership role on Ukraine but contributes far less to Kyiv than Germany does. That German frustration over support to Kyiv boiled over in this month’s debate over how the EU’s €90 billion loan to Ukraine should be used to support the European arms industry. The French made their traditional proposal that the money should be used to buy European weapons — which in turn would support French industry. The Germans hit back that preferential treatment should instead be given to companies from countries that had made the biggest contributions to Ukraine — thereby helping German industry. Given France’s lagging contributions on Ukraine, “this is a pretty clear ‘fuck you’ to Paris,” a third EU diplomat said.  Michel Duclos, a researcher at the Institut Montaigne and former French ambassador to Syria and Switzerland, said: “On Ukraine, the Germans consider that they are making all the efforts, so when the French say they want to run [military] operations, the Germans think that’s enough.” “The fear in France is that the German defense budget will at some point be double that of France, and for Paris, it would be a historic shift,” he added.  Duclos also noted the German resentment over Mercosur: “If we want more strategic autonomy, we need new partnerships,” including the EU-Mercosur trade deal, he said. “For the Germans, we don’t look serious.” FRUSTRATIONS ON MERCOSUR AND JETS     When it came to finalizing that long-delayed trade deal with  Mercosur, Berlin initially wanted to get Paris on board by giving in to various French concessions, but eventually gave up. “The country is on the brink of becoming ungovernable,” one German government official said of Macron’s inability to push back against fierce domestic opposition, particularly from farmers.   The FCAS joint Franco-German jet-fighter project is proving another major bugbear. The €100 billion venture is on life support after Paris and Berlin failed to agree on how to proceed last month. According to Peter Beyer, a foreign policy lawmaker from Merz’s conservatives, French companies are exerting “massive pressure,” and “even a French president apparently cannot see beyond that.”   “Now the thinking is going so far as to perhaps do it without the French, which I think would be a disaster, but at the moment there is no progress,” he said, referencing suggestions that Germany is looking at developing a fighter jet without French manufacturer Dassault Aviation.   All of those discussions about how far the Germans want to team up with France on weapons are now also colored by the far-right National Rally leading polls ahead of next year’s presidential election in France. “The prospect of the National Rally coming to power is already weighing heavily on French-German discussions on defense,” said Jacob Ross, a research fellow at the German Council on Foreign Relations. Laura Kayali and Gregorio Sorgi contributed reporting.

LIMASSOL, Cyprus — The EU has “doubled down on investments and supporting Greenland” because the Arctic and its security “matter enormously for us,” Ursula von der Leyen said Thursday. A day after Danish and Greenlandic foreign ministers held talks with senior members of the U.S. administration following Donald Trump’s threats to seize the island, the European Commission president said the EU would “continue our work on Arctic security with our allies, our partners, including the United States.” Her conciliatory comments belied the immense tension between the bloc and Washington since Trump accused Europe and the Kingdom of Denmark, of which Greenland is a territory, of not doing enough to secure the resource-rich and strategically located Arctic island. Denmark and several of its allies on Wednesday announced they will increase their military presence in Greenland. “What is clear is that Greenland can count on us politically, economically and financially,” von der Leyen told reporters in the Port of Limassol on Thursday, where European commissioners held talks with Cypriot officials and politicians including President Nikos Christodoulides. Cyprus assumed the six-month rotating presidency of the Council of the EU on Jan. 1. Von der Leyen underscored Europe’s economic commitment to the Arctic, noting that the EU intended to double financial support to Greenland in its next seven-year budget. She said Brussels and Nuuk, the island’s capital, “are discussing investments” in the territory and “we’re doubling down on these investments.” “The discussions on Arctic security are, first and foremost, a core issue of NATO. But I also want to emphasize that … both topics are core topics for the European Union and matter enormously for us,” she said.