10.1.1 Geopolitics: The Weakening of US-Based Liberal Internationalism

Liberal internationalism sought to create a world order governed by law, freedom, and transparency rather than power relations and secret diplomacy. While liberal internationalism was never fully implemented (as shown by various forms of Western imperialism), it has nevertheless allowed the European continent to flourish after 1945 through a rule-based liberal Atlantic order dominated by the US. The end of the Cold War revived liberal internationalism, with US President George Bush, Sr announcing a ‘new world order’ on 11 September 1990. Protectionist tensions between Europe and the US persisted, but remained within the framework of the liberal international system, notably through the World Trade Organization (WTO). For example, when Europeans threatened to complain to the WTO regarding two US laws in 1996 targeting companies trading with Cuba (the Helms–Burton Act) and with Iran and Libya in hydrocarbons (Amato–Kennedy law), Washington agreed to a compromise in 1998 that gradually lifted sanctions.¹

However, the US began to lose faith in liberal internationalism. The turning point came in 2001, first with the 11 September attacks, and then with China’s entry in the WTO three month later on 11 December. Initially celebrated, the event later sparked growing concern. US unilateralism expanded during the two terms of President George W. Bush, Jr, with the 2003 Iraq War being launched without the consent of the UN Security Council, and the failure to ratify both the Kyoto Protocol on climate change in 1997 and the Rome Statute of the International Criminal Court in 1998. Washington increasingly ‘weaponised interdependence’ by using the tools of the international liberal order to suit its geopolitical interest, such as using legal proceedings against private companies, financial regulation, or Internet regulation.²

The situation grew worse in 2016 with Brexit, the election of Donald J. Trump, and the US refusal to appoint new judges to the WTO’s Appellate Body, thereby blocking the international legal mechanism for resolving trade disputes. From 2017 to 2021, President Trump toughened this unilateral stance. Washington withdrew from major international agreements it had previously accepted, including the Paris Climate Agreement from 2015, the Trans-Pacific Partnership Agreement (TTPA) from 2016 (not yet ratified by Congress), and the Iran Nuclear Agreement from 2015. Trump ended the North American Free Trade Area (NAFTA), which had been in force since 1994, and renegotiated it to obtain a more protectionist agreement concluded in 2018. Washington has imposed broad punitive tariffs on China, as well as on its Western partners in a more limited manner. President Trump’s ambiguous stance towards Russia, as well as his vehement criticism of NATO, even cast doubt on the US commitment to defending the liberal West. President Joseph R. Biden (2021–25) re-established a more cooperative policy, but doubts remain about US leadership, especially after the reelection of Donald Trump in 2024.

A movement of ‘slowbalisation’ – a term coined by Adjieedj Bakas in 2015 – apparently brought an end to the inexorable rise of globalisation. Trade as a share of GDP grew from 39 per cent in 1990 to 61 per cent in 2008, before declining to around 55 per cent.³ Foreign direct investment has undergone the same negative trend after peaking in 2014–15, especially in China. With the supply difficulties revealed by the China–US trade conflict and the Covid-19 pandemic, the trend in the 2020s has been towards ‘de-risking’, ‘reshoring’, or ‘friend-shoring’, which is to say transferring (or duplicating) major plants outside of China in friendlier southern countries.

Three driving forces of liberal globalisation seem to be coming to an end. First, the US no longer supports it. Second, from a technological point of view, the price of transport is no longer decreasing, especially due to more stringent environmental standards. Third, in terms of regulation, the more obvious barriers to trade, such as customs duties, have already been largely removed. Non-tariff barriers such as social, environmental, and health standards remain, and are much more difficult to harmonise. Besides, there is no global will to promote international high standards in this realm, even in the Global South.

In fact, the Global South has partly filled the vacuum left by the US. The Global South denotes the emergence of non-Western superpowers, but not a homogeneous camp. These countries are nevertheless united by a willingness to move beyond the old US-led world order. In the wake of the 2007–08 financial crisis, the G20 replaced the G7 for a time. Since 2009, non-Western powers have pursued the BRICs format (initially with Brazil, Russia, India, China, and since 2010 South Africa). The group was further enlarged in 2023. For certain members, notably Russia and China, the BRICS framework adopts an explicitly anti-Western stance, whereas for others, such as Brazil and India, it maintains a neutral position. Similarly, the Trans-Pacific Partnership refused by Washington was replaced by a new treaty in 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but without China. Reconnecting with an ancestral tradition based on a China-centred worldview,⁴ Beijing has proposed its own regional organisations, such as the Shanghai Cooperation Organisation with Russia and Central Asian countries (2001), the One Belt One Road Initiative (2013), the Asian Infrastructure Investment Bank (AIIB, 2014), and an alternative payment system to the Western Swift. China has also supported the expanded use of the renminbi in international trade. It took advantage of Donald Trump’s rejection of the TTPA to propose a new one, the Regional Comprehensive Economic Partnership (RCEP) signed in 2020, which associates China with ASEAN, along with close US allies such as Japan and Australia. This agreement is less comprehensive than the EU’s Single Market, but it nevertheless facilitates trade by harmonising certain customs barriers, tariffs, and rules of origin, thereby strengthening China’s role in Asian production chains (and thwarting ‘reshoring’). China has also requested to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a more ambitious Asian trade agreement than the RCEP. It includes non-Asian Western countries such as Canada and Australia. The UK was one of the first non-Pacific states to declare its interest in participating in the capital of the AIIB, and even, in the post-Brexit context of 2021, acceding to the CPTPP.⁵

Another manifestation of the rise of the Global South is the resilience of Russia despite massive sanctions imposed by the West in 2022 following its attack on Ukraine. Moscow have been able to skirt Western sanctions by trading with non-Western countries, notably China and India. Many Western technological components whose export to Russia was forbidden by the West found their way to Moscow through friendly third countries.

In short, US-based liberal internationalism has sharply declined, primarily because of US unilateralism, but also thanks to the rise of an alternative to the Western world order. This is visible not only in geopolitics, but also in political institutions.

10.1.2 Internal Politics: The Rise of Illiberal Nationalism in China, Russia, and the West

Nationalism is a normal phenomenon for expressing the strength and ambition of a community. It can be associated with a certain degree of liberalism, as was the case in nineteenth-century Europe when national movements were often (but not always) combined with the democratic movement. But since the 2010s, nationalism has undergone a radicalisation. It has often been nicknamed as ‘illiberal’ for its disregard of the rule of law, and the emphasis on displays of brute force. Even liberal democracies have been exposed to the rising influence of illiberal demagogues, namely politicians eager to tinker with the election process (with new tools such as fake news on social media), and to then claim that their election prevails over any counterbalancing powers (such as parliaments, courts, international organisations, the media, etc.). Since political liberalism is predicated on a balance of power designed to prevent any form of authoritarian drift, such political practice is designated by the term ‘illiberalism’.⁶

The combination of moderate community capitalism and progressive liberalisation was the path largely followed after 1945 by Japan, and later by South Korea and Taiwan. After adopting community capitalism to launch their industries (with protectionism and government subsidies), these countries gradually accepted more liberal rules, both economically and politically, with Japan becoming a democracy in 1945, South Korea in 1987, and Taiwan a few years later.

On the contrary, China has practised a less liberal and more nationalistic form of neomercantilism since 1979. Unlike other emerging countries, its size (with massive reserves of raw materials), political clout (a permanent member of the UN Security Council and a nuclear power), and effective economic reforms (it has massively reduced poverty since 1979) have allowed it to control its relationship to globalisation. The country bears the memory of a self-centred world – with its very name meaning ‘Middle Country’ in Chinese – as well as a period of Western and Japanese humiliation from 1842 to 1949. After the Maoist period, Deng Xiaoping imposed a different path based on stability in 1979, combining gradual openness to liberal capitalism and preservation of the communist dictatorship.⁷ China resisted political liberalisation, but continued its process of freeing markets progressively, enjoying the implicit support of the Americans, who believed that Chinese democratisation was inevitable. For example the US secretary of state James Baker wanted to convince his Chinese interlocutors in 1991 that ‘political change will inevitably be stimulated by [their] economic successes’.⁸

Any essentialism regarding the incompatibility between Chinese culture and liberal democratic values should be avoided. In the past, many decision makers tried to reconcile the two, especially during the May Fourth Movement (1919), and with figures such as Sun Yat-sen. In 1948, when the Universal Declaration of Human Rights was negotiated at the United Nations, it was the Chinese delegate Peng Chun Chang, a philosopher eager to build a bridge between the European Enlightenment and Confucianism, who influenced its drafting by inserting the notion of ‘consciousness’.⁹

The reforms implemented since 1979 have combined progressive openness to free trade for goods with the preservation of numerous internal barriers. Initially, foreign investment had to be made in association with a Chinese company, and all production exported. The Chinese domestic market subsequently remained closed, in order to allow for the gradual adaptation of the Chinese economic fabric, which slowly opened up to private property and competition. Even after China joined the WTO in 2001, its radical form of community capitalism continued through the impossibility of acquiring Chinese companies, the obligation for foreign companies to partner with Chinese firms, the continuing risk of intellectual property theft, the inaccessibility of government procurement, and state control of the currency. In less than a decade, China has become the world’s largest exporter and second largest economy. It was further strengthened by the 2007 economic crisis, which affected the West to a greater extent. The rise of the domestic market has further reinforced China’s growth. The Middle Kingdom now has its multinational equivalents to North America’s GAFA (Baidu for Google, Alibaba for Amazon, Huawei for Apple and Microsoft, Tencent for various web services), is a world leader in green energy, and offers its citizens better services than Washington in terms of electronic payment and high-speed trains.

Xi Jinping, who rose to power in 2012, reinforced the illiberal approach internally. Externally, the One Road One Belt Initiative (2013) – with its major loans and dispute mechanism based on Chinese standards – helped project Chinese influence. It has even appealed to EU countries, in both the East (Hungary, Poland, Bulgaria) and the South (Greece, Italy). To comply with EU austerity measures, Greece had to sell part of the Port of Piraeus to Chinese investors in two stages: a partial stake in 2008 at the beginning of the financial crisis, and a majority stake in 2016 at the end of the eurozone crisis. Soon after, Athens blocked an EU position condemning Beijing’s conduct in the South China Sea, and its record on human rights.¹⁰ In 2014, thanks to a large scholarship programme, the number of African students studying in China surpassed the number studying in the US.¹¹ China’s presence in Africa is also reflected through its participation in international counter-piracy operations off Djibouti, where Beijing established its first permanent military base abroad in 2017. President Trump’s unilateral policy (2017–21, and since 2025) allowed Xi Jinping to present himself as a defender of multilateralism.

Russia is a second player challenging the US-centric liberal order, through an illiberal nationalism that combines economic neomercantilism with political authoritarianism. Russian revisionism feeds on the trauma of the 1990s, including the loss of 22 per cent of its territory after the fall of the USSR. The transition from communism to capitalism has been destructive, marked by hyperinflation, financial dependence, and the enrichment of a small minority of oligarchs. The traumatised Russian population has faced declining life expectancy. Both the population and national wealth have been halved between the USSR in 1991, and Russia in 2018.

Vladimir Putin’s rise to power in late 1999 benefited from an economic recovery fuelled by rising oil prices (in contrast to China, which relied on an industrialisation strategy). Without being as harsh as China’s, the Russian regime has become more authoritarian and chauvinistic (especially in terms of women and LGBT rights). From a geopolitical point of view, President Putin has pursued a more aggressive policy since 2007, including military interventions in Georgia (2008) and Ukraine (2014, 2022 to present), as well as a covert operation to influence elections in the West through the World Wide Web.¹²

The rise of China and Russia is part of the global trend of illiberalism. The share of the world’s population living in autocracies rose from 46 per cent in 2012 to 72 per cent in 2021.¹³ Even in the US, a failed coup occurred on 6 January 2021 to reverse the results of the presidential election. Two years later, the same phenomenon happened when the illiberal Brazilian president Jair Bolsonaro lost the election to Luiz Inácio Lula da Silva. Even within the Union, this turn towards a more illiberal nationalism has had some success since the 2010s, such as in Poland under the Law and Justice Party government from 2015 to 2023, and in Hungary under Viktor Orbán since 2010. These parties are openly hostile to liberal developments in politics and society, such as pluralism, an independent judiciary, and rights for sexual minorities. They conceive of immigration as a threat, especially since the crisis of 2015. The rule of law is undermined by legislation weakening the separation of powers, and creating tensions with the Union.

Hungary represents the most successful case of illiberalism, a term claimed by its leader Orbán, who has cited Singapore, Turkey, Russia, and China as examples.¹⁴ His approach stems from a sense of historical injustice, in this case the Treaty of Trianon of 1920, which significantly reduced Hungarian territory (formerly part of the Austro-Hungarian Empire). Orbán, the Prime Minister since 2010, has pursued a policy of systematic concentration of power, coupled with strong criticism of liberal internationalist actors. This led to the Central European University moving from Budapest to Vienna in 2018. During an election speech in February 2019, he stated that ‘Brussels bureaucrats’ wanted to encourage non-Christian immigration in order to overwhelm the historical inhabitants of the Pannonian plain. Since 2025, US President Trump has played a prominent role to encourage illiberal leaders, including Viktor Orbán.

10.1.3 Economy: The Alliance between Community Capitalism and Neoliberalism

The recent developments of community-based capitalism have sometimes translated into an original combination with neoliberalism. During his first term (2017–21), US President Donald J. Trump simultaneously practised a highly protectionist and neoliberal economic policy, marked by tax cuts for the rich, an offensive against Obamacare – social security for the poor – and the elimination of many environmental legislation. A study carried out in May 2020, at the very beginning of the Covid-19 pandemic and after three years of the Trump administration, identified approximately 100 environmental measures that were cancelled.¹⁵ The Reagan presidency (1981–89) was also marked by a combination of a neoliberalism (lower taxes, especially for the wealthy, etc.) and protectionism (the conflict with Europeans over steel), but with less intensity and more respect for its Atlantic partners. Reagan was a bulwark against the USSR, whereas Trump has constantly impaired the Atlantic alliance.

The second Trump administration (since 2025) has pursued a similar approach, exhibiting an even more aggressive vision that combines neoliberalism and nationalism. Neoliberal reforms have manifested in an unprecedented and early assault on the welfare state, notably through the dismantling of the US Aid Agency, the financial cuts to the Environmental Protection Agency, and the termination of numerous research projects. Community capitalism has emerged in the form of protectionist measures, as during Trump’s first term, but also through territorial claims (against Panama, Canada, and Denmark) and strategic collaboration with digital corporations to consolidate political power.

Outside the Western world, this combination was also illustrated by some nationalist leaders elected in the 2010s. In Brazil, Jair Bolsonaro allowed massive development of the Amazon rainforest at the expense of both the environment and the local population. In India, some radical Hindu leaders took advantage of the Covid-19 outbreak to suspend many social laws (on working conditions and the role of trade unions).¹⁶

Even in Europe, community capitalism has sometimes been combined with neoliberalism, especially in Orbán’s Hungary. In 2018, he passed a law allowing companies to impose overtime but to pay for it at a later time, prompting opponents to call it a ‘slave law’.¹⁷ More generally, his strategy of economic development is based on an aggressive search for FDI, primarily via massive subsidies to companies, including those from authoritarian countries: Hungary will be the first country to host a Chinese factory producing electric-powered cars, thanks to massive government support. As of June 2023, Hungary was the EU country with the highest share of state aid relative to GDP (under the Temporary Crisis and Transition Framework created in reaction to the Russo-Ukrainian War).¹⁸ Orbán has also waged an aggressive anti-immigrant policy. The link between neoliberalism and community capitalism is also visible in the sequence of events: it was the detrimental consequences of high neoliberalism, especially the eurozone crisis (Chapter 9), that brought far-right and far-left parties to power, which often tend to opt for protectionism. More generally, far-right parties at the European Parliament (which received a sizeable share of the vote during the 2024 elections) usually oppose solidarity capitalism, with most refusing any social and environmental measures. In particular, far-right parties (among others) have fed the European environmental backlash (since 2023), and converted it into a broader opposition towards norms and standards.¹⁹ While some standards may have less impact, others are essential to protecting the weak. In short, most far-right parties promote a nationalistic form of community-based capitalism, with restrictive immigration in particular, combined with opposition to a solidarity-based approach at the European level. If this vision is implemented, it could lead to the return of a free trade area, in other words a minimalistic European organisation devoted exclusively to the basic promotion of trade.

10.1.4 The Covid-19 Crisis as a Reassertion of State Intervention (2020–21)

The Covid-19 epidemic (2020–21) triggered an unprecedented form of state dirigisme through massive subsidies for companies and individuals affected by lockdowns. The notion of a lockdown is based on curtailing liberty of movement. The epidemic also laid bare vaccine nationalism, as major producers of vaccines and medical equipment such as the US (as of December 2020) and India (in March 2021) limited these strategic products exclusively to their populations.²⁰ Conversely, China and Russia massively distributed their vaccines to friendly countries – despite doubts surrounding their effectiveness (they were not subject to the traditional international verification process) – with a view to boosting their international influence.

Neoliberal globalisation was challenged by the pandemic, which appears to have originated from unregulated business practices such as live animal markets in China, and to have spread via global trading channels. The first area affected in Europe was Northern Italy, one of the continent’s richest and most connected regions, probably through an employee of a multinational whose colleagues returned from China.

Dependence on China became starkly obvious: the Middle Kingdom produced 42 per cent of global exports for protective medical equipment in 2018,²¹ and approximately 40 per cent of the antibiotics imported by Germany, France, and Italy. Meanwhile, US export restrictions on all vaccine components have disrupted production lines around the world. A debate subsequently emerged in Brussels in 2020: Josep Borrell, a Spanish socialist and Vice-President of the European Commission, and Bernd Lange, a German Social Democrat and Chairman of the Parliament’s Committee on International Trade, considered the possibility of encouraging companies to relocate some strategic production to Europe.²²

10.1.5 The Second Trump Presidency as the Final Blow to Liberal Internationalism

The return to power of Donald J. Trump in 2025 has precipitated a more forceful challenge to liberal internationalism. Beyond the predictable step of withdrawing from the 2015 Paris Agreement on climate change, the second Trump administration went further by making aggressive territorial claims against US allies, including Panama, Greenland, and even Canada. This level of assertiveness is unprecedented at least since the era of President William McKinley (1897–1901), whom Trump referenced in his inaugural address, and his immediate successor, Theodore Roosevelt (1901–09). These two presidents expanded US territorial holdings, incorporating regions such as the Philippines, Hawaii, and others.

In terms of trade, following a series of highly unbalanced trade agreements concluded in July 2025, the average US tariff is estimated to have risen to 18 per cent – eight times its level prior to the Trump II administration. This new system could be interpreted as a revival of ‘imperial preference’, as it is heavily skewed in favour of the United States, at least in the short term (without accounting for the potential effects of higher tariffs on inflation and productivity). In July 2025, several of the United States’ most steadfast allies – including Japan, the United Kingdom, and the European Union – were compelled to sign agreements under which they accepted unilateral increases of 10–15 per cent in US tariffs on most goods (with certain exemptions), without any compensation or retaliatory measures, alongside unilateral reductions in tariffs on US-imported goods. Furthermore, the President of the European Commission, Ursula von der Leyen, was obliged to commit to purchasing $750 billion of US energy and to investing $600 billion in the United States. It remains uncertain whether this agreement will be fully implemented, as the Commission lacked the authority to mandate private investment.²³

Europeans were compelled to accept such a severe agreement for three reasons: first, the EU ran a trade surplus with the United States, making the threat of even higher US tariffs in the absence of an agreement credible; second, the US had already concluded agreements with other partners (Japan and the United Kingdom) before engaging the EU, raising the risk of European isolation; and third, without a tariff agreement, Europeans feared that Washington might withdraw its support for Ukraine. This exemplifies a characteristic feature of the post-liberal international order: since international law carries limited weight, all issues are deeply interconnected. Trade matters are not governed solely by trade law and the WTO, but by global bargains encompassing multiple domains. Consequently, the implementation of certain EU legislation that might be perceived as adversarial towards the United States – such as the Digital Markets and Services Acts (DMA-DSA), the environmental and social regulations of multinationals, or the Carbon Border Adjustment Mechanism (CBAM) – is jeopardised by the assertiveness of the Trump administration, and are sometimes even targeted explicitly in the EU–US trade deal concluded on 21 August 2025.²⁴

This policy is unprecedented in US history since the 1930s with respect to tariffs, and since the late nineteenth century in terms of territorial threats between liberal democracies. The assault on international norms has further strengthened China’s role on the global stage. Following the tariff war initiated by US President Trump in 2025, the possibility of the European Union joining the Asia-centred Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was raised.²⁵ If realised, the regulatory centre for international trade could shift from Brussels and Washington to Asia. More generally, traditional US allies, including European countries, Japan, and South Korea, would be less inclined to comply with US demands in the future and more likely to explore alternative measures for self-defence, potentially including nuclear capabilities. In response to this resurgence of community capitalism, Europe has endeavoured to reinvent itself.

10.2.1 The Failure of European Industrial Policies

Industrial policies have never been Europeanised due to the difficulty of defining the concept of European preference, the problem of fair return, opposition to the delegation of power, and little motivation from exporting states (which do not see the need for it). As a result, only a minimalist horizontal approach has prevailed, with the only European tools being subsidies for non-competitive research, environmental protection, and venture capital (notably through the European Investment Bank).²⁶

This minimalistic approach was dominant during the period of ‘high neoliberalism’: European did not wage a comprehensive policy to support their solar panel industry, which was crushed by Chinese subsidies. The situation is even worse now, as China has emerged as a major competitor in all sectors where Europeans enjoyed a competitive edge, including information technology and even cars. China was a net importer of cars in 2020, but in 2023 it became the world largest exporter thanks to the electric vehicle revolution.²⁷ The Letta and Draghi reports from 2024 clearly underline Europe’s lost competitive edge in industry, and call for more assertive (but not dirigiste) European industrial strategy.

European companies are logically the target of non-Western takeovers. In the automotive sector, the Indian company Tata purchased Jaguar and Land Rover in 2008, the jewels of the former colonial metropole, while the Chinese company Geely took over the Swedish company Volvo in 2010. In the steel industry, the Indian companies Mittal and Tata respectively bought Arcelor and Corus in 2006, the two European champions.²⁸ Even in the football industry, Abu Dhabi bought Manchester City club in 2008, while Qatar bought PSG in 2011. Of course, most of these companies stayed in Europe (football clubs cannot be offshored), but their leadership have moved outside of the Western world, making it more difficult for political leaders and the people they represent to exert influence over them.

In the international arena, European countries have been divided against China, with Southern countries willing to attract Chinese investment after the shock of the eurozone crisis. They have also been divided against Russia, especially before the Russo-Ukrainian War. In 2005, Gerhard Schröder’s Germany chose to build the Nord Stream pipeline with Putin’s Russia, at the risk of weakening Poland and Ukraine (Moscow could henceforth pressure these two countries by limiting their gas supplies while continuing to supply Western Europe). The building of North Stream 2 started in 2018, after Russia’s invasion of Crimea. It was interrupted only by Russia’s full-scale war against Ukraine. Lesser-known examples abound. For example, Cyprus tried to solve its banking crisis with Russian aid in 2013, before accepting the European bailout.²⁹ In Ukraine, the EU entered into an ambitious trade partnership in 2013, which some Europeans (especially in Poland) explicitly saw as a project to reverse Russian influence. But when the country needed financial assistance in 2013, the EU did not provide it. According to the historian Adam Tooze, this was one of the many elements that triggered the Orange Revolution of 2014, as it prompted Ukrainian President Viktor Yanukovych to hesitate between Moscow and Brussels.³⁰ Kiev obtained more emergency aid only after the Russian invasion of Crimea and Donbas. Finally, as in the eurozone crisis, the Union was obliged to lend more than it initially planned, because it had waited too long. The Union has confined itself to a liberal strategy based on commercial attraction, rejecting the solidarity and community approaches for wielding international influence.

10.2.2 The Persistence of National Champions and the Difficult Emergence of European Champions

National industrial policies have remained prevalent. This strategy has sometimes been associated with a Europeanisation of companies, but not always. Since US companies retain a competitive edge in many sectors, European firms often prefer to partner with them than with their European competitors. For example, a 2020 European study on R&D in Artificial Intelligence shows that European actors were involved in cooperation with non-European actors much more often than their US and Chinese counterparts.³¹

National champions have nevertheless proven resistant, pursuing one of two strategies. The Germans have adopted a low profile, with most German companies remaining untouched by foreign takeovers, a sign of the resilience of its community capitalism model, for they have been protected by a dense network of long-term financial participation, and special rules limiting foreign ownership (for example the 50+1 rule of the Bundesliga).

France has adopted a more visible stance in defending its national champions, using state intervention to protect against foreign takeovers, encourage mergers, and rescue strategic companies in the name of ‘economic patriotism’.³² In 2014, the government acquired a stake in the capital of Peugeot SA (PSA) to bolster the large car manufacturer, which had been weakened by the financial crisis. At the time, all governments were intervening massively to save their industries, including the US and Germany in the automotive (GM and Opel) and banking sectors. The European Commission acted to limit the German aid granted to Opel in 2009.³³ However, France kept its stake in Peugeot (now Stellantis), while Washington quickly sold off its stake. In Germany, the federal state of Lower Saxony still owns 12 per cent of the Volkswagen company (after long owning 20 per cent), while the French state owns 15 per cent of Renault. This public support may have helped both companies flourish and expand in Eastern Europe, where Volkswagen bought the Czech company Skoda, and Renault the Romanian company Dacia.

Some firms have constituted true European champions, in the sense that it is impossible to link them to a single state. The founding of the steel giant Arcelor from the French, Luxembourg, and Spanish steel industries in 2002 represented one such instance, but it was taken over by the Indian company Mittal in 2006. STMicrolectronics is a French–Italian semiconductor manufacturer that was once among the world’s leaders (reaching the top five in 2001), and remains a mid-sized multinational. It benefited from European support in the late 1980s and 1990s (Eureka funding and an anti-dumping procedure against Japan), as well as from Brussels’s tolerance of French and Italian state aid in the early 1990s.³⁴ The most emblematic European champion remains Airbus, formed in 1999 as the European Aeronautic Defence and Space Company (EADS), which combined the French Aerospace company Aerospatiale-Matra and the German DASA, with a smaller contribution from the Spanish CASA. It became Airbus Group in 2014. The French, German, and Spanish states still have a minority share in the capital, and a right to scrutinise many strategic decisions. Regular French–German bickering over Airbus shows that national governments never completely abandoned these strategic sectors. The refusal by the German government to let the Italian Bank Unicredit buy Commerzbank in 2024–25 is also telling. In the end, these examples confirm the lack of European industrial policy.

10.2.3 Europe’s Normative Power: The ‘Brussels Effect’

It is as a normative power that the Union has pursued a form of liberal neomercantilism.³⁵ Brussels has promoted its standards globally since the 1980s, moving from being a ‘standard-taker’ to a ‘standard-maker’ (see Chapter 6). The EU benefited from the establishment of the Single Market in 1993, and from its expansion to an ever-increasing number of countries. It also benefited from the fact that the Single Market is, to a certain extent, more integrated with respect to standards than other large national markets, such as the US and India. This provides a strong incentive for multinationals to promote European standards globally. European norms also have the advantage of being compromises struck between countries with different approaches, thereby making them more likely to be adopted by a wide range of countries.

The notion of the Brussels Effect was coined in 2020 by Anu Bradford, who documented cases where Brussels legislation influenced global standards in competition policy, digital technology, health, safety, and environmental protection.³⁶ In the digital sector, the Personal Data Protection Directive (Directive 95/46) in 1994, and the General Data Protection Regulation (GDPR, Directive 2016/679) in 1996, imposed new standards for protecting personal data. They influenced certain international laws, forcing US technology multinationals to comply with them. More recently, the 2023 Digital Markets Act (DMA) and Digital Services Act (DSA), have further strengthened this dynamic (see Chapter 8). The 2024 Artificial Intelligence Act (AI Act) is one of the first comprehensive laws setting international standards on AI, adopting a risk-based approach.

This assertion of Europe as a community of interest is based on a mix between liberty and community capitalism. The GDPR, DSA, and AI Act regulate the Internet with a view to promoting the rights of individuals. They are predicated on the principle of non-discrimination, as European actors are subject to the same rules as non-European ones. They do not seek to protect European industry, in contrast to the Chinese ‘state-driven model’ and even the US ‘market-driven’ one (since US firms dominate the market).³⁷ The European model itself has been disputed. During the DMA-DSA negotiations (2020–22), Northern European prime ministers and the Danish Commissioner Margarethe Vestager have defined digital sovereignty as the ability to monitor the market rather than steer it, while the French Commissioner for Internal Market, Thierry Breton, has emphasised relocating production to Europe.³⁸

Europe’s normative power has also been strengthened by constant dialogue with the US, structured in particular by the first agreement in 1991 regarding cooperation in competition policy, and later by agreement in 2000 (International Safe Harbour Privacy Principles) on transatlantic data transfer, even if they were later invalidated by the Court of Justice of the European Union. The Union and the US Biden Administration (2021–25) also set up a Trade and Technology Council in 2021 to avoid wide legislative divergence.

Finally in agriculture, Southern European countries (France, Italy, Spain, Portugal, and Greece) secured protections for designations of origin from the Union in 1992, despite opposition from some countries in the North (the UK, Denmark), which saw them as unwelcome protectionism.³⁹ These standards combine food quality and geographical location, thereby bringing together market-based rules (the standard improves market information), social and environmental concerns (product quality), and the protection of local communities.

This European normative power is reflected in the free trade agreements of the twenty-first century, which henceforth primarily concern non-customs barriers to trade, since tariffs have already been significantly reduced. The EU–Canada Comprehensive and Economic Trade Agreement (CETA) concluded in 2016 reflects this dual dynamic. It offers export opportunities for Europe – through the protection of controlled designations of origin in the agricultural and food sector – reduced customs protection, and access to Canadian public procurement markets. Such an agreement entails broad regulatory convergence and confidence in the partner’s ability to implement common rules. For instance, Canadians allow GMOs and antibiotics in certain animal products, which is forbidden in the EU. This implies that Ottawa must control the application of certain EU standards for Canadian products exported to the EU. As usual, much will depend on the agreement’s implementation. On the whole, European normative power is the manifestation of a moderate form of community capitalism, one that is fully compatible with liberal internationalism.

Recently, the ‘Brussels Effect’ has been challenged by a reactionary ‘Washington Effect’, promoting regressive norms. In 2025, the second Trump administration launched attacks on diversity and inclusion programmes, at times threatening European companies operating in Europe to abandon such practices.⁴⁰ The EU–US trade agreement of August 2025 explicitly addresses several landmark pieces of legislation concerning socio-environmental and information technology regulation. Moreover, amid concerns that Europe may be sidelined in the artificial intelligence (AI) race, European experts are increasingly focused on resolving the trade-offs between, on the one hand, safeguarding privacy and freedom of speech – as embodied in the GDPR, DSA, and AI Act – and, on the other hand, promoting European competitiveness.⁴¹ Consequently, the ‘Brussels Effect’ can no longer be taken for granted.

10.3.1 The Reaction to Global Protectionist Tensions

The return of community capitalism in a more aggressive form has been embodied primarily by the trade wars of President Trump (2017–21, 2025–), and by China’s unprecedented domination of world markets thanks to a bold neomercantilist policy and to its sheer geopolitical clout.⁴² The ‘Chinese challenge’ is therefore much more dangerous for European industries than the ‘Japanese challenge’ of the 1980s or even the ‘American challenge’ of the 1960s.

The Union’s first collective response was to defend liberal internationalism. In 1920, Europe saved the Wilsonian project of the League of Nations by supporting the new organisation, which its primary promoter, the US, had ultimately rejected.⁴³ A century later, as a peaceful law-abiding actor, the Union has an interest in safeguarding the legal regulation of globalisation. The first response from Europeans was to respond to the trade offensive by relying on EU and WTO legal procedures.

The second approach was to compensate for the US leadership deficit by strengthening existing global institutions, such as the WTO or NATO, in the face of Washington’s vacillation. The 2015 Paris climate agreement was preserved, and the retreat of the US did not prompt any further departures. The multilateral framework of international law was prioritised to avoid escalation, thereby facilitating the return of the US to more cooperative practices under President Joseph R. Biden (2021–25). Finally, the Union has sought to strengthen free trade by concluding new agreements, linking the elimination of trade barriers to regulatory convergence, notably with Canada (CETA, 2016), Japan (2018) and Mercosur (2024, pending confirmation). An agreement was even reached with China in late 2020, under the German presidency of the EU, on investment-related issues, although its implementation has been blocked by protests on human rights.

The Union’s third response was to strengthen its commercial arsenal. Many laws have been adopted since 2018 to strengthen anti-dumping legislation (2018), control foreign investment (2019), ease export restrictions (2020) and trade sanctions (2021), promote reciprocity in opening up public procurement (2022), consider distorting foreign subsidies in competition cases (2022), and tax some polluting imports (2023 with the Carbon Border Adjustment Mechanism or CBAM, see Chapter 9). Most of these laws had been debated for a long time. Reciprocity in opening up public contracts was requested in 1984 in the Albert–Ball Report in connection with the debates on the Common Market.⁴⁴ The current International Procurement Instrument (IPI) regulation was proposed in 2012, but adopted only in 2022. It introduced a supranational procedure, enabling the Commission to investigate serious and recurring restrictions on access to the public procurement contracts of a third country. Similarly, the distortive Foreign Subsidy Regulation adopted in 2022 stipulates that the Commission can take foreign subsidies into account when applying competition policy, and therefore in its assessments of mergers, cartels, and public procurement. In 1988–89, French officials (notably Jean-Claude Trichet, the future President of the European Central Bank, who at the time was the Director of the French Treasury) requested that foreign competition be taken into account when the first regulation empowering the Commission to control mergers was negotiated.⁴⁵ However, it was adopted in 1989 without the French provision, which was seen as overly protectionist at the time. Lastly, the CBAM is partly inspired by the carbon tax adopted by the Commission in 1992.

These European protectionist tools should be put into perspective, for everything ultimately depends on how the Europeans will apply these measures especially as they face unprecedented protectionist threats from 2025 onward—from the United States, with its unilateral tariff war, and from China, with its restrictions on critical-mineral exports. Will the Europeans be willing and able to assertively defend European interests at the risk of countervailing measures?

10.3.2 Tolerating the Return of National Protectionism

National protectionist temptations reappeared in the West during the financial crisis (2008–12). All governments, even the most ardent advocates of free trade in Washington, London, and Berlin, granted massive aid to their struggling companies, with no European coordination other than regulatory tolerance. In Brussels, the Commission temporarily suspended its restrictive rules on state aid control. The Covid-19 crisis (2020–21) once again prompted the Commission to tolerate state aid to industry on an exceptional basis. The Russo-Ukrainian War that broke out in February 2022 forced the Commission to renew its lenient stance towards aid to industry, especially due to sharply increasing energy costs.

The more protectionist international context forced even the most ardent zealots of free trade, such as the Germans, to evolve. Following China’s acquisition of German companies operating advanced technologies (notably Kuka, taken over by the Chinese Midea Group in 2016), the German government became more concerned. In 2016, the Minister of Economic Affairs, Sigmar Gabriel, blocked China’s acquisition of two companies producing electrical and electronic equipment, Aixtron and Ledvance.⁴⁶ In 2019, following Commissioner Vestager’s refusal of the merger between the French Alstom and the German Siemens, the French and German economic ministers, Bruno Lemaire and Peter Altmeier, issued a joint memorandum calling for a European industrial policy. It encapsulated two old French demands previously rebuffed by the Germans: reciprocity in opening up public procurement, and modifying competition policy to take account of international competition. Paris and Berlin believed that the Alstom–Siemens merger was rejected because of an underestimation of Chinese rail competition. Both countries also requested protection against certain foreign investments. This memorandum nevertheless did not garner consensus, with the CDU leader at the time, Anegret Kramp-Kambauer, rejecting it as being too interventionist. Since 2021, the German trade balance with China has become negative. The Middle Kingdom largely dominates the new electric car sector (BYD surpassed Tesla in 2025), while German brands continue to struggle. The Russo-Ukrainian War that erupted in 2025 has further increased German temptations to help its industries, as its previous advantages – exports to China’s huge market, and imports of low-cost energy from Russia – have been disrupted.

The passage of the Inflation Reduction Act (IRA) in the US in 2022 has further revived national industrial policies. Based on massive subsidies for climate-friendly products (such as electric cars), it imposes a minimum of US content for products to be eligible for a public subsidy, thereby violating WTO rules. The IRA was also described, by Secretary of the Treasury Janet Yellen, a former central banker, as ‘modern supply-side economics’, an industrial policy with beneficial social and environmental effects.⁴⁷ This is a combination of liberty, solidarity, and community capitalism. A comparative study of the IRA and EU subsidies clearly shows the far more discriminatory nature of US measures.⁴⁸ In addition, aid to industry from US states has flourished.⁴⁹

The Union reacted by further easing its control over state aid. Adopted for one year on 23 March 2022 in response to the Russo-Ukrainian War, the latest package in this area was supplemented on 9 March 2023 by a broad New Temporary Crisis and Transition Framework. If there is a real risk of investment being directed away from Europe, ‘Member States may provide … the amount of support the beneficiary could receive for an equivalent investment.’⁵⁰ There are looming fears of the return of a subsidy race, as private companies could encourage governments to overbid subsidies in order to attract them.

Unlike the late 1980s, when Bonn demanded greater state aid discipline, Berlin is now being targeted for its generosity. As the continent’s central economic and industrial power, with low debt and deficits, the German government’s ability to provide subsidies is unmatched in Europe. Between 2005 and 2019 (the year before Covid-19), the level of German state aid for the economy tripled.⁵¹ Germany has risen from twentieth to fifth in the ranking of EU countries providing the most aid. While France granted 50 per cent more aid than Germany (as a proportion of GDP) in 2012, Berlin now grants 50 per cent more aid than Paris.

Lastly, the return of protectionism and of nativism is also evident in the increasing obstacles to the free movement of people both within the European Union and from abroad. Under the influence of more nationalist leaders such as Giorgia Meloni, the European Union has adopted a more restrictive approach to migration policy, exemplified by the 2024 Pact on Migration and Asylum, stricter controls at the EU’s external borders, and agreements with non-European countries (notably with Turkey in 2016, Libya in 2017, Tunisia in 2024) designed to encourage them to retain migrants in exchange for financial aid. This policy has been very controversial from a human rights perspective.⁵²

10.3.3 A Tentative European Industrial Policy

As a result of this more protectionist context, a European industrial policy of sorts is slowly emerging. Its most striking successes are two European companies, Airbus and Ariane. They were created outside the Union framework, although the Commission has defended Airbus against Boeing at the GATT/WTO since the 1980s. The Union has even entered the space industry by funding the Galileo satellite positioning programme, which was launched in 1999, relaunched in 2007 after delays (notably by French Transport Commissioner Jacques Barrot, 2004–08), and finally became operational in 2016. The programme has been mired not only in financial and industrial complications, but geopolitical ones as well, for some actors consider Galileo to be a purely commercial venture (China was invited as a partner), while others view it as one element in Europe’s diplomatic clout.⁵³

Beginning in 2014, the Juncker Commission pursued a more proactive vision.⁵⁴ It launched the Juncker Plan, which consists of a €21 billion guarantee providing leverage to finance economic development projects, especially for SMEs, with a target of at least €300 billion, which was achieved in 2018.⁵⁵ The scheme became Invest EU in 2021. Its impact is estimated at 4–10 per cent of the EU’s investment volume, but it is difficult to assess whether the projects supported are new, or would have been financed anyway.⁵⁶ More generally, from 2015 onwards Jean-Claude Juncker explicitly praised the model of national investment banks, following the model of the European Investment Bank for the Union, the Caisse des Dépôts et Consignation in France, and the Kreditanstalt für Wiederaufbau in Germany (equivalent in size to its French counterpart).⁵⁷ These institutions epitomise a mix of liberty and community capitalism. They are state-owned banks whose purpose is to support active industrial policy by providing financing facilities to certain companies. This stands in contrast to a more sceptical discourse towards these institutions, which were suspected a few years earlier of obstructing competition.

The Commission has even promoted a more vertical industrial policy since 2014, with the Important Project of Common European Interest (IPCEI), which facilitates the acceptance of targeted state aid in particularly important cases.⁵⁸ This has allowed the Commission to authorise €3.2 billion in aid from a consortium of seven European countries to build factories manufacturing electric car batteries (which make up approximately 40 per cent of the price of electric vehicles).⁵⁹ Germany and France are the main funders of this ‘Airbus of Batteries’, followed by Italy and Poland. In the same vein, the European Chips Act adopted in 2023 facilitates the installation of semiconductor plants in Europe, within a broader context of dependence on production in East Asia. These measures will likely lead to massive financing for US, Taiwanese, and South Korean producers, thereby illustrating an original feature of the European industrial policy, namely its lack of preference for EU companies. Defence is the only area where an explicit European preference exists, as the European Defence Fund launched in 2021 only supports companies from the Union (and countries in the Single Market, such as Norway and Switzerland). In environmental industrial policy, European companies had to buy carbon credits abroad to compensate for their excess emissions: EU carmaker Stellantis planned to buy tens of millions of euros of carbon credits from the US carmaker Tesla in early 2025.⁶⁰

The Covid-19 pandemic also forced Brussels to act. As early as April 2020, the Commissioner for Competition, Margrethe Vestager, stressed the risk that foreign powers such as China could pay discount prices for European firms in disarray due to the pandemic.⁶¹ In June 2020, in conjunction with the Commissioner for Industry Thierry Breton, she proposed strengthening the procedures for controlling acquisitions of companies by non-European firms, and evaluating the negative impact of foreign subsidies.⁶² Finally, the shortcomings of liberal globalisation in supplying masks and gloves – once considered basic, but suddenly scarce in an emergency – prompted the EU to adopt controls for certain trade flows. Regulation 2020/402 of 14 March 2020 made the export of certain products essential for combating the epidemic subject to authorisation.

The Union was less protectionist than its primary trading partners, which instituted numerous export bans. The Union’s economic liberalism was obvious during the EU–AstraZeneca dispute in early 2021, when the British–Swedish firm, which provided almost the entire first batch of vaccines to the Union, delivered only 30 million of the 120 million doses planned in the first quarter of 2021. Brussels was accused of having excessive faith in market rules, as the EU had exported 10 million vaccine doses to the UK between 1 February and mid-March, but received no doses itself. Furthermore, AstraZeneca explained that its contract with the British government required it to make priority deliveries to the UK, as London had provided massive funding for its research. This naïve EU commitment to free trade rules was shared by Germans: Berlin had financed the start-up BioNTech, which found one of the first vaccines, but it did not include a priority delivery clause. BioNTech partnered with the US multinational Pfizer, which certainly prevented any such provision. In contrast, on the other side of the Channel, according to journalist Dave Keating, there were plans for the Oxford laboratory that discovered the vaccine to partner with the US company Merck, but London imposed the alliance with the British AstraZeneca instead.⁶³

The Union’s protectionism was limited during the Covid-19 crisis. Regulation 2020/402 of 29 January 2021 made the export of vaccines subject to authorisation. It was used on 4 March 2021 by Italy, which blocked the departure of 250,000 doses of AstraZeneca vaccines destined for Australia, with the support of the Commission, but it was not much used afterwards. It was later replaced by a new and more sophisticated export control system, which allowed for donations of vaccines to poorer countries. The Union remained open to Russian and Chinese vaccine diplomacy. Hungary, the Czech Republic, and Slovakia voiced their intention to acquire non-Western vaccines, even if they did not adhere to the standard approval procedure due to a lack of verifiable data.⁶⁴ The Commission granted them the authorisation to do so, but the move soon fell through, for in April 2021 Chinese officials themselves recognised the limited effectiveness of their vaccine.⁶⁵

10.3.4 Europe’s Diplomatic and Military Power in the Making

The idea of shaping Europe as a diplomatic and military power re-emerged in four stages. The first was the Maastricht Treaty of 1991, which created the Common Foreign Security Policy (CFSP). The CFSP was a failure from the very beginning, given European impotence in the war in former Yugoslavia between 1991 and 1995. The second attempt came in 1998, when the French–British Saint-Malo declaration revived Europe-wide defence after renewed commitment to European integration by the new prime minister of the UK, Tony Blair. In 1999, the Berlin Plus agreement concluded at the NATO summit facilitated relationships between that organisation and the Union, granting it access to EU resources. That same year Javier Solana of Spain, the former NATO Secretary General, became the EU’s top CFSP representative. The Europeans militarised Airbus by launching the A400M transport aircraft programme in 2001. The Germans departed from their pacifism by agreeing to deploy troops to Afghanistan. However, the Iraq War in 2003 shattered these efforts. At the Azores (Portugal) summit on 16 March 2003, the leaders of four European countries – José Manuel Barroso of Portugal, Tony Blair of the UK, José Maria Aznar of Spain, and Silvio Berlusconi of Italy – expressed their full support for the US intervention in Iraq without a UN mandate, despite popular demonstrations in their countries. Central and Eastern European countries also supported the Americans, while the German and French governments opposed it. As a permanent member of the Security Council, Paris exercised its veto, which eventually forced the Americans to intervene in Iraq without a UN mandate. It was at this time that the former Reagan administration official Robert Kagan drew a contrast between Mars – the US, intent on using hard power in an ‘anarchic Hobbesian world’ – and Venus, the Union, more peaceful and bent on negotiating living in Kant’s ‘Perpetual Peace’.⁶⁶

A third attempt came in 2007 with the conclusion of the Lisbon Treaty, which created a more substantial Common Security and Defence Policy (CSDP). It included an article on mutual assistance in the event of armed aggression on its territory (Article 42-7), giving concrete expression to the idea of Europe as a community of shared destiny. However, military expenditure was still excluded from the European budget (Article 41-2). NATO was vindicated by France’s return to the organisation’s integrated command in 2009. The nature of the Union, essentially normative and peaceful, has not changed. In 2011, former Commission President Romano Prodi waxed lyrical: ‘The rule of law has replaced the crude interplay of power … by making a success of integration, we are demonstrating to the world that it is possible to create a method for peace.’⁶⁷ The Union’s main external influence remained its ability to prompt neighbouring states wishing to join it to institute changes. An important exception was the 2015 agreement with Iran (Joint Comprehensive Plan of Action) to control its nuclear programme. The Union was a full-fledged signatory to the agreement (its High Representative for Foreign Affairs Federica Mogherini played a significant role at the end of the negotiation), alongside the three primary European countries (Germany, France, the UK), in addition to the major non-European powers of Russia, China, and the US.

President Trump’s non-cooperative policy (2017–21) initiated a fourth turning point. His trade war, unilateralism (he pulled the US out of the agreement on Iran), and fierce criticism of NATO sowed doubt regarding the permanence of American engagement in Europe. In 2019, French President Emmanuel Macron feared that NATO was ‘brain dead’. Without going that far, Chancellor Angela Merkel recognised that Europe needed to strengthen its autonomous defence capability, in a marked change of tone.

The discourse on Europe as a power evolved. In his speech at the Sorbonne on 26 September 2017, the newly elected Macron asserted the crucial importance of the Union stressing its ‘sovereignty’, including in new areas such as digital technology, the environment, as well as foreign and defence policy, in which he called for a ‘capacity for autonomous action … in addition to NATO’. Macron’s ambitious rhetoric echoed past French projects, but in a more Europeanised manner, with some of its points being adopted by other Europeans. In the speech she delivered upon being appointed in 2019, Commission President Ursula von der Leyen of Germany encouraged her Commission to assert itself geopolitically. The March 2019 Communication on China broadened the traditional – and purely economic – perspective to include more strategic considerations, such as network security and monitoring foreign direct investment.⁶⁸ The Covid-19 pandemic and the Russo-Ukrainian War shifted the discourse towards the need to reduce the vulnerability of certain strategic production chains, especially those relating to medicine, computer equipment, and even armament. The vocabulary is certainly less self-centred than in Paris: the Commission, like Spain or the Netherlands, has insisted on the concept of ‘open’ strategic autonomy, with a view to avoiding any protectionist drift.⁶⁹ Even the German Chancellor Olaf Scholz, in his Prague speech in 2022, spoke of European ‘sovereignty’, albeit in a more moderate tone: Europe should be ‘responsible for its own security’ and promote its interests in the world.⁷⁰ While the vocabulary is different from that of Paris, the evolution from the traditional pacifist and normative vision of Europe is noteworthy.

Concrete decisions followed. On the military level, European countries agreed to support French interventions in Africa, whereas they were previously viewed with great suspicion as postcolonial adventures. In 2020, ten European countries agreed to support Operation Takuba, the French intervention against jihadists in Mali, which had been ongoing since 2013. However, only two countries, Estonia and the Czech Republic, took part in the military operations, and the largest troop contingent remained French. In 2022, all of the European troops left Mali after a pro-Russian military coup the previous year. From the financial point of view, in 2016 Commission President Jean-Claude Juncker launched two initiatives that led to the creation of two new funds, the European Peace Facility (set up in 2021), and the European Defence Fund (in 2017). The first is an intergovernmental mechanism that circumvents regulatory budgetary restrictions to finance military equipment. It includes an element of preference, as funding is reserved for European firms. The second is a more federal mechanism that funds cooperation between European industrial actors in defence R&D. The sums spent remained modest compared with national defence budgets, and did not involve the production of European weapons until the Russo-Ukrainian War. Besides, the European military sector was also marked by a sharp decline in military spending after the end of the Cold War, as well as by the emergence of new exporters such as China, South Korea, and Turkey. The mood has changed recently, with the outbreak of the Russo-Ukrainian War in 2022 and Trump’s second term in 2025. However, European military spending has risen only slowly, and remains far below its Cold War average.

The 2001 decision to produce the A400M – the first military aircraft from the European company Airbus – reflects both the success and limits of Europeanisation, since the programme has experienced numerous delays, especially due to the differing needs of the various sponsoring armies. In addition, the A400M replaces an aircraft from the US, the Lockheed Hercules, but a French–German one as well, the Transall, whose programme was launched in 1958. Europeanisation had therefore already been present for a long time in connection with this type of transport aircraft. In particular, Franco-German cooperation in armament have been regular and often difficult despite a strong political impetus, for example, with the helicopter Tiger, which entered into regular service only in 2009 whereas the programme was launched in 1984.⁷¹

Another European company emerged in 2001 in the missile sector, the French–British MBDA. In 2017, Paris and Berlin launched two joint initiatives to create the tank and fighter jet of the future, but negotiations between industrial actors have proven very difficult. In 2022, at the beginning of the Russo-Ukrainian War, the President of the Italian Council of Ministers, Mario Draghi, lamented: ‘Our security spending is about three times that of Russia, but it’s divided into 146 defence systems. The United States only has 34.’⁷² Although a European Defence Agency was set up in 2004 to facilitate European collaborative projects, it is estimated that only 18 per cent of the EU military budget is collaborative in nature.⁷³

Structural barriers remain the same. On the one hand, the principle of fair return and safeguarding national defence industries prevents any effective sharing of the production process. On the other, Atlanticist logic remains prevalent. Despite these weaknesses, the constant strengthening of European institutions as well as defence funding have created habits and meetings between professionals in the sector, leading to a certain rapprochement between strategic and military cultures, although the role of the Union remains weak: it is a ‘Europeanisation without Europe’.⁷⁴ Similarly, in terms of identity, a survey conducted in the summer of 2021 showed the emergence of a small majority in support of a European army within the Union (except in Germany and Scandinavia), but only as a complement to national armies.⁷⁵ The next logical step would be to share the production process at the European level, for example, with a clear division in French–German cooperation, with French leadership in fighter jets, and German leadership in tanks. For now, such a Yalta of the arms industry remains an illusion.

10.4.1 Managing the Identity Challenge

Beyond short-term factors, Brexit was structurally an assertion of distinctive British features.⁷⁸ All other European countries were occupied by armies of authoritarian regimes during the World War II, except for Britain, which resisted Hitler alone from June 1940 to June 1941. The legacy of the world’s largest colonial empire allows London to project itself even today as an alternative space to the European continent, namely that of the Commonwealth and English-speaking countries.

More broadly, Brexit was also part of the international movement to reassert local identities. According to surveys conducted shortly after the vote, the main reason for the Leavers (those who voted to leave the Union) was to regain control over the country’s borders and migration policy. Brexit supporters have sometimes expressed hostility to immigration they deem excessive, especially from Central and Eastern European countries. After joining the EU in 2004, the UK was one of the few countries that did not use the transitional clauses limiting free movement. This factor, combined with the Blair government’s underestimation of future migration flows and weak labour regulations, led to strong immigration from the former Eastern bloc to the UK.

The exit from the Union was also supported by neoliberal elites in line with a Thatcherite tradition equating Brussels with a socialist bureaucratic beast. Boris Johnson, one of the leaders of the Leave campaign, was part of this dynamic. Kwasi Kwarteng, Dominic Rabb, Priti Patel, Chris Skidmore, and Elisabeth Truss, all of whom became ministers in the Johnson government in 2019, published a pamphlet in 2012 entitled Britannia Unchained, which called for radical neoliberal reforms. Through a rollback of social regulations, they hoped that the UK would become a ‘Singapore-on-Thames’.⁷⁹ Rishi Sunak, who served as prime minister between 2022 and 2024, followed the same approach, reneging on environmental measures. Similarly, David Hannan, an influential voice in the Leave campaign, published ‘The Case for EFTA’ in 2005, with EFTA referring to the European Free Trade Area.⁸⁰

Conversely, in 2016 trade unions defended the Remain vote in the name of preserving European social and environmental laws. Jeremy Corbyn (2015–20), the Labour leader at the time, insisted on preserving regulatory convergence with the EU in these areas when he voted on the EU exit agreements presented by the government in 2018–19. Conversely, as foreign minister (2016–18) and prime minister (2019–22), Johnson delivered contradictory speeches, some of which were clearly neoliberal, such as when he denounced European standards as bureaucratic hurdles preventing the conclusion of trade agreements, especially with the US. Washington has explicitly identified stricter European health standards as major obstacles to the conclusion of such an agreement.

10.4.2 Preserving the Single Market

In the face of Brexit, negotiated since 2016 and effective in 2020, the Union has pursued a strategy of safeguarding the integrity of the Single Market and its normative power. By contrast, the UK wanted continued access to the Single Market without being constrained by EC law. However, this would have seriously challenged the unity of the Single Market, and hence its interest: if one of its members could pick and choose the legislation it wanted to follow, then other members could do the same. In the end, nobody would follow the common legislation, with the Single Market ultimately dissolving into a mere free trade area. London also wanted to separate the four freedoms of movement, retaining those relating to goods, services, and capital, but rejecting the one concerning persons, but this would also have seriously undermined the identity dimension of the Single Market.⁸¹

The Union negotiator was a seasoned French and European politician, Michel Barnier, who focused on safeguarding the unity of the EU-27 and the Single Market (including its four liberties of movement) through regular visits to European capitals. This strategy strengthened Brussels, and neutralised the risk of Brexit contagion.⁸²

Finally, the agreements concluded with the Johnson government in 2020 (on the withdrawal in January 2020, and the future relationship in December 2020) ended with an ambiguous compromise: the island of Great Britain would be free of Single Market standards, while Northern Ireland would have to remain in strong regulatory convergence with the Union. The price of maintaining the absence of border controls between Northern Ireland and the Republic of Ireland (and hence the Union) had to be paid by internal controls in the UK, particularly in the Irish Sea (between Great Britain and Northern Ireland). The implementation of the agreement sparked traffic disruptions within the UK, with product shortages in Northern Ireland in early 2021. Violent protests by Unionist Protestants fearing greater distance from London agitated the streets of Belfast. In February 2021, the Unionist party DUP announced its intention to launch legal action against the Irish protocol negotiated between London and Brussels, as it would be incompatible with the 1800 Act of Union, which provided for unfettered trade throughout the UK.⁸³ In response, in July 2021 Johnson threatened to restore controls at the Irish border if Brussels did not accept reduced internal controls in the UK, which the EU refused.⁸⁴ Accepting such a request would pose significant and increasing risks of fraud, with the importing via Ireland to the rest of the Union of products that do not comply with European standards. For the moment the risks are low, as legislation remains very close on both sides of the Channel, but differences will naturally increase in the future. A compromise was later reached between Brussels and the Sunak government in 2023, but the substantive problem remains.

10.4.3 Reorganising the Bilateral Relationship

Two scenarios could emerge in the long run. The British could opt for the neoliberal Singapore-on-Thames strategy and practise legislative Darwinism, lowering the standards in force in order to increase competitiveness vis-à-vis the continent. Projects to increase flexibility in labour law after the lifting of EC working-time constraints were revealed in January 2021.⁸⁵ Such decisions would be logical, as they would be in keeping with the constant opposition by conservative governments towards the European Working Time Directive. Similarly, adopting less stringent health standards would facilitate the import of North American agricultural products, and hence the conclusion of a trade agreement with the US. If such a race to the bottom materialised, then the temptation of fraud in Ireland (by importing cheaper products with lower standards from the UK to the Union) would be great, leading to simmering conflict between Brussels and London. This temptation remains present even with the return to power of a Labour government in 2024 under Keir Starmer’s leadership. Confronted with a growing risk of trade war with the US under Donald Trump’s second term, London still appears ready to negotiate with Washington on this issue. It struck a first tentative deal with the US in May 2025. Another solution would be for the UK to follow the path of Norway, Switzerland, and Iceland by rejoining the Single Market, probably with a special status. In any case, growing US isolationism and the threat to NATO posed by Trump’s unilateralism certainly reinforce the case for stronger military cooperation on the European continent, including between EU and non-EU members. While it is difficult to determine what people really want, in June 2016 a majority of the British people voted either to remain in the Union or for what they anticipated to be a soft Brexit but in the end, they got a hard Brexit.

Conversely, in the EU, the departure of the British may lead to a more assertive European economic identity. The adoption of a more cautious approach towards China has been facilitated by the departure of David Cameron, one of Europe’s most enthusiastic proponents of Chinese investment, along with his British supporters in Brussels.⁸⁶ The former British representative in Brussels, Sir Ivan Rodgers, has indicated that the massive recovery plan adopted in 2020 to contend with the pandemic would have been vetoed by the UK if Brexit had not occurred.⁸⁷ At this point, Brexit has become a vexing but secondary topic for Europeans. While Brexit initially challenged the Union as a community, it has ultimately presented an opportunity to reassert it.

10.5.1 A Major and Surprising Event

The Russo-Ukrainian War has four remarkable features with respect to the history of international relations. First, it is the first military aggression on European territory since the World War II, excluding the war in the former Yugoslavia, which was more local in nature. Even during the Cold War, the USSR respected the principle of the inviolability of borders reasserted at the 1975 Helsinki Conference.⁸⁸ The war marks the end of attempts to integrate Russia within a Western world order, as Moscow was irritated by NATO enlargement and the abandonment of the Partnership for Peace proposed by President Clinton in the 1990s as an alternative to enlargement, which proved illusory with the deteriorating situation in Russia.⁸⁹ Russia was not an international pariah at the time; for instance, it was Russia’s ratification of the Kyoto Protocol in 2004 that allowed it to be implemented against US opposition.

Second, this war involves two major belligerents. Russia is one of the two major nuclear powers, the world’s largest country in terms of surface area, and among the ten most populous and wealthiest countries. While Russia is no longer an ideological power like the USSR, its authoritarian and illiberal model is attractive to the far right in the West, and also generates some interest among far-left voters (notably the rising star of the German far left, the BSW created in 2024). Moscow has also waged a large-scale ideological offensive on the web to discredit the West.⁹⁰ Ukraine is the largest European country (after Russia), and one of the largest grain exporters in the world. The conflict is also massive in terms of death toll, with the number of Russian casualties surpassing that of the intervention in Afghanistan, which lasted ten years (1979–89).

Third, field operations have shown the importance of military dynamics that Europeans have long forgotten, notably the importance of having a large reserve of ammunitions, and most of all the power of national pride, which explains the heroic Ukrainian resistance, even as everyone expected a rapid collapse in February 2022. If Russian plans for a rapid Ukrainian conquest had been successful, Moscow would probably have threatened the Baltics and Moldova next (they remain Moscow’s targets if Kiev is defeated).⁹¹ Europeans have trimmed down their armies since the end of the Cold War; the most ambitious countries have kept small units for extra-European operations, but with no production capacity to supply a long and intense war without US support.

Fourth, this conflict has a strong ideological component.⁹² If Ukraine were to lose, it could weaken Europe and its model of law-abiding liberal democracies. The invasion has already strengthened Russia territorially via the annexation of Crimea in 2014 and the Sea of Azov in the 2022, leading to a drastic reduction of the Ukrainian coastline. While the war could weaken Moscow economically in the long run – due to the exile of skilled Russians, trade sanctions, and greater difficulty accessing high-tech Western components – Russia has been able to find alternative suppliers in the Global South. As a matter of fact, a majority of non-Western countries remained neutral in the Russo-Ukrainian War (such as Turkey and India), or even pro-Russian. Moscow was able to maintain its oil exports despite the European embargo by massively increasing flows to Beijing and New Delhi. The Russo-Ukraine War thus forced Europe to react to avoid further decline.

10.5.2 The Clarification of European Borders

For Europe, the conflict has clarified the continent’s limits as a community of destiny. It has drawn a clear border in the east and the south. In the east, the EU’s military mobilisation against Russia, Russia’s exclusion from the Council of Europe in 2022, and the fact that even a neutral country such as Switzerland took part in sanctions against Moscow, shows that Europe’s border is now firmly set between Ukraine and Russia. In fact, fear of Russia – and of the USSR – has been a long-standing motivation for European integration. In his pioneering book from 1923 entitled Pan-Europe, Richard von Coudenhove-Kalergi pointed out that Russian expansionism was a constant feature, forcing Europe to unite lest it come under Russian influence, as could have occurred in 1915 if Nicholas II had won the war, or in 1918–20 if the Marxist revolution had succeeded in Germany through internal revolution or Lenin’s military offensive.⁹³ The same fear motivated some Europeans, who believed that without US troops Stalin’s forces would have advanced until Brest, in French Brittany (and not Brest-Litovsk in Belarus).

In the south, the border with Africa and the Middle East has been reinforced, for both good and bad reasons. European solidarity with Ukrainian migrants stands in contrast to the tensions caused by the arrival of non-European migrants from Africa or Asia. Admittedly, the situation is not quite the same, as Ukrainian refugees are overwhelmingly women and children, a population that always tends to cause less rejection than migrant men. However, European governments have clearly identified with the Ukrainians by massively providing aid, with no strings attached. For the first time, the Union invoked the 2001 Temporary Protection Directive to provide temporary protection for refugees. The Union redirected certain European funds to help finance the directive, which facilitates movement, work, and access to social benefits.⁹⁴

In the south-east, the rift between Turkey and the Union has deepened. While the country is still a candidate for EU membership, and remains one of NATO’s main armies, its neutrality in the Russo-Ukrainian War conflict clearly brings it closer to the Global South. Its impartiality allowed it to secure a grain agreement between the two belligerents in July 2022.⁹⁵ Turkey appears as an ancient and self-centred empire, a world of its own, like Russia or China.

However, this clarification of the Union’s borders does not mean that the enlargement process will stop soon. Thanks to Russian aggression, Ukraine and Moldova were admitted as candidates for EU enlargement in June 2022 (as well as Georgia in 2023), but with no guarantee that accession will come soon or at all. Since 2014, Ukraine has enjoyed a free trade agreement with the EU, the Deep and Comprehensive Free Trade Area (DCFTA), which helped reorient its trade from the East to the West. A referendum held in the Netherlands in 2016 rejected this agreement, albeit with a low turnout. Today, Ukraine’s inclusion remains predicated on important reforms, in particular surrounding the rule of law and the fight against corruption.

The Russo-Ukrainian War lends more credence to the idea of a multi-speed Europe, with an integrated core consisting of the eurozone, then the European Union, and beyond it the whole continent. Proposed on 9 May 2022 by French President Macron, the European Political Community is now a forum for discussion across the continent’s forty-seven countries. The initiative is notable because a similar French project was presented by President Mitterrand in 1991, the European Confederation, which was rejected because it was conceived as an alternative to the Union’s enlargement towards the East (see Chapter 2). On the contrary, Macron explained that the creation of the European Political Community did not necessarily exclude further enlargement. The Forum met for the first time in Prague on 6 October 2022. It has helped bring the UK back on board with respect to European cooperation. On the whole, the clarification of Europe’s border and the European Political Community could reinforce the Union’s cohesion.

10.5.3 The Union’s Unprecedented Mobilisation

The conflict has generated the Union’s unprecedented mobilisation in four areas: welcoming Ukrainian refugees, sanctions against Russia, energy, and financial and military support. In terms of Russian sanctions, the EU made quick and radical decisions. On 27 February 2022, three days after the start of the invasion, the Union suspended most trade relations, excluded most Russian banks from the SWIFT interbank system, and froze Russian holdings in Europe, including those of the Russian Central Bank. Previously, sanctions were more targeted at companies or individuals.

The Union also made energy-related decisions that were unthinkable before the Ukrainian aggression, as it was heavily dependent on Russian hydrocarbons. At the beginning of the war the Union collectively spent €1 billion per day on Russian hydrocarbons. As a result, in early April 2022, it had already provided €35 billion to Russia through its imports, compared with just €1 billion in aid to Ukraine.⁹⁶ At first, coordination was difficult because Germany was very dependent on Russian gas, and because Hungary remained politically close to Russia. In the end, Moscow facilitated European coordination by gradually and unilaterally interrupting its gas deliveries in the summer of 2022. The Union decided to drastically reduce its imports of Russian gas and oil, but fell short of an embargo. It also capped the price of Russian oil at $60 per barrel on 3 December 2022.

On the military level, while no European soldiers have been sent to the front – European countries have always been careful not to be considered co-belligerents – the Union has made the unprecedented decision to deliver lethal weapons to a country at war. Admittedly, Brussels acted through its member states by reimbursing national contributions via the Peace Facility, doing so for significant albeit modest sums given the scale of the war effort (€3 billion as of year-end 2022 for the Facility, compared with €55 billion in European aid).⁹⁷ In May 2023 the Union also adopted the Act to Support Ammunition Production (ASAP) to mobilise €500 million from the EU’s general budget to co-finance the production of arms in Europe, including ammunition. Denmark withdrew its thirty-year-old opt-out with regard to participation in the Union’s defence programmes via a referendum held on 1 June 2022.

On the whole, the financial effort by Europeans was massive and unprecedented, and could lead to structural changes on the continent. From the financial point of view, while the US provided more help to Ukraine than the Europeans in 2022, the figure was reversed in 2023. In 2022–23, Europeans provided slightly less military aid, and much more financial and humanitarian aid (especially to millions of Ukrainian refugees).⁹⁸ According to the Kiel Institute, government support to Ukraine in 2022–24 totalled €132 billion for Europe and €114 billion for the US. The nomination of the outspoken Russian critic Kaja Kallas (the former prime minister of Estonia) as the next High Representative of the Union for Foreign Affairs and Security Policy in June 2024 is another sign of Europe’s determination, which will be further tested by Donald Trump’s return to power.

In Germany, the Social-Democrat Chancellor Olaf Scholz announced the so-called Zeitenwende (epochal change) on 27 February 2022: faced with the scale of military threats, Berlin agreed to deliver weapons to a country at war, and to massively increase its military budget (through the creation of a special fund of 100€ billion). In 2025, the new Christian-Democrat Chancellor Friedrich Merz, representing the centre-right CDU, went further by obtaining an exemption from the ‘debt brake’ – a German constitutional provision that limits government deficits for military expenditure. Such measures would have been inconceivable prior to the Russo-Ukrainian War, as Germany had historically prioritised pacifism and stability. Beyond the German context, European states collectively agreed in early 2025 to substantially increase their military spending, in response to US President Donald Trump’s threat to withdraw the American security umbrella.

Eurozone members have been discussing the possibility of excluding some military expenditure from the Stability Pact. This would amount to momentous change. To take just the example of France and Germany, between 2000 and 2022, their indebtedness diverged considerably. Both countries had the same level of public debt in 2000, but France’s doubled in two decades, while Germany’s remained almost flat. However, France spent 0.8 per cent more of GDP per year on defence than Germany, notably to fund its nuclear arsenal, which could be part of a European defence system.⁹⁹ This additional military expenditure represents one-third of the rise in French debt over the period. Consequently, the greater assertiveness of the European Union as a diplomatic and military power could also affect its internal economic rules.

10.5.4 Europe as a Junior Member of the Atlantic Community

However, this assertion of hard power in Europe is part of an Atlantic dynamic, in which Europe has remained a junior partner. Since the creation of NATO in 1949–50, born as a reaction to Russian aggression (Berlin in 1948–49, indirectly in Korea in 1950), Europeans have always counted on US military support (see Chapter 5). The end of NATO was envisaged in the early 1990s with the end of the Cold War,¹⁰⁰ but the Europeans never gave up on it.

Several factors attest to the primacy of an Atlanticist logic. First, Western military interventions are contingent upon US military support, which remains indispensable in domains such as intelligence gathering and nuclear capabilities. It is primarily the US nuclear umbrella threat that prevents Russia from using its own nuclear arsenal. In early 2024, several politicians in France, Germany, and Poland evoked the possibility of ‘Europeanising’ the French nuclear arsenal, perhaps by extending the guarantee of French deterrence (in exchange for European funding, as the French nuclear arsenal represents 20 per cent of French military expenditure), but no genuine discussions were launched.¹⁰¹ In any event, both the French and British nuclear arsenals are ten to twenty times smaller than the US and Russian ones, with the British one also being intertwined with that of the US.¹⁰² Even though the European defence budget has increased by 30 per cent since the start of the Russo-Ukrainian War (2022–24), Europe’s total defence spending has still not exceeded 1990 levels in real terms, and is on a par with Russia in purchasing-power parity (in 2023).¹⁰³

Second, the war has reinforced NATO, as Sweden and Finland have shed their neutrality to join the organisation. Europeans have coordinated with the US and other Western allies within the framework of the G7 and the Atlantic alliance. This explains their effectiveness. Third, before the Trump II administration, the American contribution to military aid was greater than that of Europeans both in terms of quality (notably intelligence) and quantity (either directly as aid to Ukraine, or indirectly as aid to European countries to replenish their stocks after their gifts to Kiev). On 4 September 2023, the Ukrainian Minister of Defence estimated the military assistance provided since the beginning of the conflict at $100 billion, 60 per cent of which came from the US.¹⁰⁴ This pre-eminence corresponds to US supremacy in terms of military spending: the US military budget is three to four times higher than the collective defence budgets of all EU countries combined.¹⁰⁵ What is more, US military expenditure is more efficient than its European counterpart because it is unified. Consequently, the meeting to coordinate arms deliveries took place in Germany, but did so under US leadership at its Ramstein military base. The first meeting was held on 26 April 2022, and was chaired by US Secretary of Defense Lloyd Austin.

Hence, the inauguration of a much more isolationist US administration under Trump II represents a formidable challenge for Europeans should they be required to ensure their own defence without the US nuclear umbrella. Trump’s challenge goes much farther than the previous complaint of US presidents about the lack of European funding, which existed since Eisenhower (see Chapter 5). The only solution for Europeans to be more effective would be to closely coordinate their defence programmes and capabilities, on either a federal (as in Servan-Schreiber’s call from 1967) or more probably on an intergovernmental basis. The European identity is too flimsy to support a full federalisation of this area. What is more, any progress in this area should include non-EU members such as the UK and Norway; Canada has even been mentioned after Trump’s offensive against its neighbour in 2025. Concrete proposals have already emerged: in 2023, the then Estonian Prime Minister Kaja Kallas (who has served as the EU High Representative for Foreign Affairs and Security Policy since 2024) proposed a joint European weapons procurement programme for Ukraine, as the Europeans did for vaccines during the Covid-19 pandemic.¹⁰⁶

Third, the increase in military spending in Europe did not benefit the European arms industry alone. The famous German Zeitenwende resulted in significant purchases of US equipment, beginning with F-35 aircraft, and later Patriot missiles and Arrow-3 hypersonic ballistic missiles (the latter being Israeli-American) as part of the Sky Shield air-defence system. Launched by Germany in October 2022 in response to massive Russian air attacks on Ukraine, Sky Shield is shared by nineteen European countries (including Switzerland). In addition to these American and Israeli-American missiles, it also includes German-made IRIS-T missiles. The French and Italians did not participate because they jointly produce a different anti-aircraft missile, the Aster. Berlin also conditioned its deliveries of Leopard tanks on US willingness to send their Abrams tanks first. Similarly, when Warsaw delivered some of its tanks to Ukraine in 2022, it replaced them with South Korean ones because they were cost-effective, and because South Korean factories were the only ones ready to deliver them quickly.¹⁰⁷

Fourth, the Union is far from being united in its stance on the Russo-Ukrainian War. Diplomatically, the Union remains divided between a few players who are attracted by the illiberal Russian model, such as the Hungarian government; a hesitant majority (Germany, France, Italy); and Central and Eastern European countries, which are sometimes fiercely anti-Russian. There are also simmering French-German tensions: President Macron has often chastised other leaders for their lack of support for Ukraine, even as France ranks low compared with other European countries for aid provided (far below Germany and the UK),¹⁰⁸ while German Chancellor Scholz (2021–25) has often appeared hesitant, paralysed by a bickering coalition (with Greens supporting Kiev, several social democrats being more pacifist, and liberals focused on austerity).¹⁰⁹ With regard to the relationship with NATO and the US, Paris has always remained more critical and willing to assert Europe’s independence than Berlin.

Beyond this traditional French–German difference, divisions among Europeans are important because they have undermined support for Ukraine. Since unanimity is required for the most important decisions, Hungarian reluctance has delayed the adoption of sanctions. Even Poland has wavered. A staunch supporter of Ukraine due to its cultural and geographical proximity (and fear of being the next country targeted by Russia), Warsaw nevertheless imposed an embargo on Ukrainian wheat, and on 20 September 2023 even on certain arms deliveries, in retaliation for what it described as dumping. The difficulty of exporting grain via the Black Sea forced some Ukrainian wheat to transit through the Union. Warsaw subsequently accused Kiev of using the circumstances to sell wheat in transit countries such as Poland, much to the displeasure of Polish farmers. The quarrel has abated, but it shows the limits of Europe’s community spirit.

To conclude, the Russo-Ukrainian War has had mixed consequences on Europe asserting itself as a diplomatic and military power. On the one hand, Europe has been more assertive as a community. At the start of the war on 22 February 2022, the prospect of Ukrainian resistance and European influence in the conflict was low. Russia was expected to win quickly. Instead, Ukrainians have resisted fiercely, and cast their fight as a struggle between European democratic civilisation and Russian authoritarianism. They have enjoyed somewhat hesitant but generally steady support from the West. Such a scenario would have been inconceivable had Trump been in office in 2022. Ukraine now has a prospect of joining the Union, which was unthinkable before. The Union’s old instruments of trade, support for refugees, and targeted funding have been reoriented to massively support Ukraine’s war effort. The Union is now fully embracing military and strategic issues. While military aid initially came predominantly from the US, Europe eventually caught up with Washington, and has provided more overall support.

However, most operational military decisions are still taken by member states and coordinated by NATO under US leadership. Besides, the US commitment to NATO and to supporting Ukraine is dwindling under the Trump administration. In addition, geopolitical divisions have remained strong within the Union, although they are not surprising, because they can be found within each Western country, with the far right and the far left often remaining much more pro-Russian (with exceptions such as Giorgia Meloni’s pro-US Fratelli d’Italia). Finally, from a geopolitical point of view, it is not yet clear whether the enlargement to Ukraine will happen soon, and whether it will strengthen the EU as a power, or dilute it into a vast free trade area.