The most successful historic cycle in Europe, which began with the Marshall Plan in 1947 and the start of European integration in the 1950s, is now at its most critical point. All signs indicate that this cycle is rapidly approaching its end, and the biggest question is: where is a united Europe heading?
Today, we face the threat of 30% across-the-board tariffs from the U.S., while the Euro has appreciated nearly 15% against the Dollar since the beginning of the year. At the same time, European industry is called upon to become more “competitive,” despite bearing triple the energy costs (natural gas and electricity) compared to the U.S.
How is the European Commission address these combined challenges, which threaten to cause permanent damage to the economy in general and to the highly valuable export sector in particular? By planning to impose a horizontal tax (of amount unknown) on businesses and an additional €14 billion in taxes on tobacco products to boost its budget! Unfortunately, it is becoming increasingly clear that the leaders of European policy no longer seem to recognize reality.
Today, President Trump’s tariff announcements against the EU coincides with the overall rearmament of NATO member states—a choice aimed primarily on definitive abandonment the fiscal austerity defined by the Stability Pact. The reactions—or rather the lack thereof—to Trump’s aggressive barrage of tariffs, which are announced, multiplied, and then reduced, are themselves seeds of destabilization.
Now almost exclusively focused on ballooning defense spending—which will remain a paper plan or it will dramatically downgrade the welfare state, unless accompanied by broader development initiatives—the European Commission appears to be “negotiating” for months with the U.S. on a mutually beneficial trade agreement. Yet there is no tangible outcome, only growing frustration on the other side.
Meanwhile, grandiose statements and often aggressive “leaks,” lacking real substance, attempt to distract from the harsh reality.
Through crises, the EU has always moved forward—it was the embodiment of Europe’s willpower. However, today, integration has lost its propulsive dynamic. Europe’s growing geopolitical absence risks being paired with economic and business disintegration. Not because the objective capabilities are lacking, but because they are being stifled by unrealistic bureaucratic policies and one-dimensional ideological obsessions.
Ultimately, this reveals one thing: a failure to understand the real geopolitical and economic conditions in Europe, in relation to the U.S. and the rest of the world—even as major events continue to unfold, exposing the transformations underway.
The first thing Europe must do immediately is to urgently and effectively negotiate a new trade agreement with the U.S., with which it maintains a significant trade surplus—avoiding escalation and empty threats.
The second is to adopt the Draghi-Letta proposals to boost competitiveness and establish a truly common and effective market, instead of inventing new ways to burden businesses.
Let’s not delude ourselves: the long- awaited existential crisis of the European Union is already here. It is a multi-layered crisis—affecting economic competitiveness, geopolitical influence, and social cohesion—bringing significant political consequences that are dangerous for its future.
It will not be tackled with wishful thinking or knee-jerk reactions.
