We have all dreamed of a Europe taking advantage of the current geopolitical turbulence to gain autonomy.
We have read the Letta report, deciphered the Draghi report, and validated the choice of the necessary decarbonization of the European production system.
The objective was to no longer be too dependent on American choices, to give ourselves the means to innovate and to create the conditions to have European champions competing, in the long term, with their Chinese and American competitors.
We had the tools and the ideas. Thus, we imagined strong choices to determine our own path and write our own story.
Certainly, this wasn’t the easiest path for our aging economies. But these choices also made political sense. The White House’s excesses, by contrast, determined a more reasonable path for all European countries. Moreover, polls among European citizens showed a strong attraction to Europe and a terrible distrust of the American strategy.
It was thought that the arrival of Friedrich Merz as German Chancellor would refocus the German economy on Europe. Taking advantage of the abolition of the public debt constraint, it was anticipated that development would be centered on German momentum.
The possibility of a European capital market was envisaged to recycle Europe’s excess savings into investment, thus creating a virtuous dynamic that would benefit all European citizens.
Since 2021, a 15% tax rate has been envisaged for all international companies in order to normalize competition. This would put an end to the race for the lowest tax rate. It was also necessary to prevent tax evasion by multinationals.
In this quest for autonomy, we had believed that governments and the Commission in Brussels would resist the tariff measures of the new American administration. Europe is a gigantic market of more than 400 million wealthy Europeans. We might have imagined that this would be favorable to us in the balance of power with the United States.
The EU’s trade surplus with the USA was also a means of pressure to define the desirable choices for Europe.
Of course, the task was complex. It would have required a balance of power, mobilizing all European resources to create a European consciousness in this difficult time.
Then came the NATO summit. Europe is now ready to meet the US administration’s demands regarding military spending. This can be seen as a necessity for Europe, and it is true. We must have the means to defend ourselves. This is a necessary dimension of autonomy.
But in the short term, Washington welcomes European purchases in the military sector. As the US State Department points out, this will create numerous jobs and strengthen the American military industry. Oh! What a bargain for the Europeans.

At the same time, Europeans are rushing to negotiate a trade agreement to avoid any major surprises on July 9 when the White House announces the new tariffs.
The aim is also to avoid losing contracts already concluded across the Atlantic.
The only trade agreement so far is the one signed by Great Britain, which has a balanced trade balance with the United States. This agreement can be summed up as reduced access for British products to the American market, but easier access for American companies in Great Britain.
Considering the European surplus, one does not dare to imagine the agreement that could be signed if the objective is rebalancing.

But now the Europeans want to sign. Germany wants to save the German automobile sector, and Rome wants to maintain good relations with Washington. In other words, Europe is ready to agree to pay €40 billion each year in customs duties to avoid the confrontational logic necessary for greater autonomy. Europe is thus making the White House’s task easier and making it easier to carry out its projects. The budget proposal, described by one US senator as a Robin Hood in reverse, will be made easier.

In this story, three consequences
1-Europe is gradually ticking all the boxes desired by the White House. Consequently, we must, as the Canadians have just done, forget the GAFAM tax. Access to the European market will not be restricted for American technology companies. There is no doubt that the ability of Europeans to create European champions, as the Letta report calls for, is rapidly fading. To achieve this, we must be able to isolate and protect the market on the old continent.
2-The second dimension is that reindustrialization now appears to be a lost dream. Europeans have firmly committed to military spending that will fuel American arms companies. This will strengthen American industry to the detriment of Europe, since the dynamics and resources will be on the other side of the Atlantic.
Long ago, we talked about the military-industrial complex, which described the interactions between these two sectors. In coordination with the American state, this military-industrial sector was central to the development of American power. With the recent episode, it has come to the forefront again. Under these conditions, how can we encourage industrial companies to expand and invest massively on the old continent? Europe, ultimately, is simply a means to strengthen the United States in its power struggle with China.
3-Europe is eagerly awaiting the choices desired by Washington.

What to conclude?
There was an opportunity for Europeans to gain autonomy and rebalance relations with China and the United States. The Europeans chose the American side. The logic of the global confrontation will consist of only two camps: the Americans and the Chinese. Europe has lost control, and the dream of reindustrialization is over. Europe and industry are now only in tune with the past. The Americans decided that in the West, if any country should reindustrialize, it should be the United States, not Europe, and Europe has just enthusiastically accepted.
In other words, the growing per capita income gap between the US and Europe will continue to widen. The Draghi report’s warning about the lack of innovation and the inability to mobilize European savings has not been allayed. Each country will continue to play its part.
A direct consequence is that the global euro that Christine Lagarde spoke of no longer makes much sense. In her words, this benchmark euro was the counterpart to a more autonomous Europe, a Europe that makes choices and is credible in the directions it takes over the long term. It would have been an economy where European champions develop, ready to safeguard and develop activity and employment in Europe. This is now beyond our control.
I recently wrote about the need for a European history, a history that tells us about ourselves and guides our actions. If this history ever exists, it will serve, like the Letta and Draghi reports, to shore up the shaky offices in Brussels. It’s a shame.