Residents pick their way through a ruined area of Hamburg, Germany, after an Allied bombing attack in 1943
World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.
Seventy-five years ago the idea of the European Union was born with these words. Amid the ruins of the second world war, the Schuman Declaration – which called for economic interdependence between erstwhile rivals – set a wounded continent on the course to unprecedented peace and stability. Thus began a project that would bring dozens of countries and half a billion people into a shared market, currency and political union. It remains the most audacious transnational democratic innovation of our age.
Today Europe faces challenges new and familiar: an aggressively expansionist Russia, an increasingly disengaged and hostile United States, and persistent weaknesses in its politics and economy. Together, they undermine the economic and security foundations on which its democracy and prosperity rests. To remain strong, free and independent, Europe must again marshal creative efforts proportionate to the dangers which threaten it. Essentially, the task amounts to a once-in-a-generation reinvention of the EU itself: deploying hard as well as soft power; incorporating new members while being prepared to jettison existing ones; focusing ruthlessly on the things that matter most while pulling back from micromanaging things that don’t; overhauling its clumsy decision-making arrangements; and so ensuring Europe can stand on its own two feet as the US withdraws.
This means confronting new realities of a world that is being remade before our eyes. Most consequential are the changes being wrought by a US administration as convinced of its own victimhood as it is of Europe’s weakness. America appears determined to turn its back on the relationships and institutions it helped create that delivered peace and prosperity across the Atlantic, and served its own interests at home and abroad. It no longer matters whether future administrations reverse course: the trust and predictability that underpins those relationships and institutions have been irrevocably damaged. After the recent eruption of protectionism – and insults – who now believes that Nato’s Article 5 holds firm? Crucially, who believes strongly enough to gamble their country’s future on it? Even if a staunchly pro-Nato president were elected tomorrow, the spell – for that is what a mutual security guarantee is, in so many ways – has been broken. Even the most sentimental European Atlanticist would now concede that the continent’s security and wellbeing can never again depend on the vagaries of 200,000 voters in three swing states an ocean away.
While it is impossible to precisely predict the consequences of recent US decisions, the following seem fairly unavoidable: nuclear proliferation will go up, not down, as countries from Poland to Korea to Japan consider securing their own nuclear capabilities. Authoritarians will feel emboldened to attack the liberal international order and China will exploit opportunities in the gaps left by America’s sudden volte-face.
The status of the dollar as a global reserve currency will go down, not up, not least since the Trump administration appears to regard it as a burden rather than an advantage. And despite all the Sturm und Drang of Elon Musk’s Doge cuts, the fiscal incontinence of the US government will continue, America’s debts will become harder to service and the likelihood of a significant US fiscal crisis will go up, not down.
Against this darkening backdrop, Europe has concluded that increasing its independence is now a strategic imperative. Most remarkable have been generational shifts in member states’ attitudes on defence. Chancellor Merz’s Germany is re-emerging after a lifetime on the sidelines of security policy. President Macron appears willing to extend France’s nuclear umbrella across the Rhine.
A Nordic-Baltic bloc is emerging that gives the most proportionally to Ukraine, and Poland is rapidly ramping up defence expenditure. Notable, too, have been Britain’s increasing appetite to join collective European defence and security arrangements, Turkish companies’ partnerships with European drone makers and Canada’s enthusiasm for deepening military-industrial links with the continent.
Europe’s leaders appear suddenly willing to entertain previously forbidden ideas: opening the spending taps, welcoming scientists displaced by the US Government’s assault on American academe, building a digital euro to rival stablecoins denominated in US dollars, planning for the Europeanisation of Nato, and floating new partnerships beyond its borders. A continent long derided for timidity is fizzing with new ideas and initiatives, revisiting the self-imposed strictures that have inhibited its immune response to past threats.
Yet old habits die hard. In too many European capitals there remains lingering hope that somehow the storm will pass. Some pray that Putin’s perfidy will make the Americans change course in Ukraine, that the US will forgive years of European underinvestment in Nato. Others hope Trump’s sky-high tariffs will be whittled back to zero, and that boosting China’s influence in Europe – a direct strategic consequence of US disengagement – will encourage a rethink in Washington.
The question now is not whether Europe wants to change. It is whether it will change enough, and fast enough.
This wishful thinking is matched by another abiding bad habit: one-upmanship within Europe when collective action against the threats from without should be paramount.
Trump’s tariffs have set the cat among the European pigeons, scattering member states as they attempt to exempt their most prized exports – from French wine to German pharmaceuticals – from the onslaught. The US administration, harbouring a particular contempt for the EU’s institutions, relishes wielding divide-and-rule leverage – granting the British a lower tariff, buttering up Prime Minister Meloni, appealing to Poland’s deep-rooted Atlanticism and so on. All help to weaken already loveless European attitudes towards Brussels.
If this naivety and fragmentation continues Europe will connive in its own terminal decline: hollowed out from within by a failure of collective leadership, and picked apart by an increasingly predatory constellation of the US, China and Russia. Its institutions will subside into a European equivalent of the United Nations – lofty bodies with almost no political sovereignty, brimming with process but increasingly bereft of real-world power. The dream of a Europe free, strong and whole will have sputtered to an end at the hands of the nationalism, protectionism and big power conflict which it was founded to overcome. There is an alternative. Europe’s stop-start progress has often been driven by crisis as much as by forward planning. The sticky nature of European governance – and the difficulties of corralling so many different interests – usually delivers lethargic decision-making.
History suggests Europe acts most boldly under the greatest duress. The reverberations of the 1970s Opec oil crisis drove economic integration, including the creation of the single market. Less than 18 months after the Berlin Wall fell in 1989, the former East Germany joined the EU as part of German reunification, and negotiations for the Maastricht treaty – the most consequential in a generation, which laid the foundations for a single currency – began while the USSR was collapsing. More recently, the pandemic prompted the creation of the first significant EU-wide debt instruments, and Russia’s invasion of Ukraine accelerated defence and intelligence cooperation.
So it is in keeping with the maddeningly stop-go history of European integration that this shock – greater geopolitically than 1989 or even 2008 – could once again be the crisis harbinger of radicalism. The question now is not whether Europe wants to change. It is whether it will change enough, and fast enough.
The truth is that the EU’s current institutional set-up is not fit for purpose. The Brussels institutions were designed to micromanage a regulatory and welfare state of a bygone era. The EU needs to be rewired to wield hard, not just soft, power – and to focus only on the strategic priorities facing the continent.
Twenty-five years ago, when I was an MEP, I published a pamphlet titled “Doing Less To Do More” advocating streamlined European decision-making. It was clear then that “the EU is active in a bewildering array of areas where EU-level action is neither essential nor necessary, while other areas, notably external and internal security, suffer from a lack of effective EU integration”. This misallocation of scarce resources – time, attention and political capital – has only got worse in the intervening years.
The myopia of much EU decision-making in the midst of tectonic shifts must end. (Infamously, it took 30 years to agree a definition of chocolate.) Europe’s institutions should drop much of what they do today – from micromanaging farming subsidies to crafting tourism policies – to focus only on the existential priorities: defence, energy, and innovation.
Start with innovation: there is no better recent example of the EU’s predilection for self-harm rather than self-empowerment than tech policy, where Europe has prioritised restraining the technological advances of leading US and Chinese tech companies over the needs of its own innovators. Extraordinarily, the EU’s digital single market still does not exist in practice. Its tech ecosystem remains balkanised by countless national and regional regulations, and data protection and licensing requirements. Growth capital is still severely limited compared with the US. During my time in Silicon Valley, I was struck by how needlessly damaging this is to the cause of innovation in Europe: ask any digital entrepreneur in Athens, Lisbon or Berlin how much harder it is to make their inventions available to consumers in Europe than it is for their competitors to sell into their vast domestic markets in the US or China. This failure to capitalise on the competitive advantage of harmonisation has a cost: if all the pontification over the years about the clout of the single market had actually been acted on by Brussels, the continent would not now be so far behind.
Early moves from the European Central Bank and EU finance ministers to launch a digital Euro should also be pursued urgently, especially given the US’s promotion of dollar-denominated “stablecoins”. A digital euro run by private companies should not be excluded either. Europe has missed the boat on many recent technological innovations; it cannot afford to lose further influence over the global payments system – especially when serious questions are being raised about the reserve currency status of the dollar.
On energy, Europe cannot compete with the US and China while facing structurally higher energy prices. In 2024, EU wholesale gas prices were on average nearly five times those in the US, and average EU industrial electricity prices were roughly two and a half times higher (with even more extreme price differences in the UK). The continent has taken solid steps to end its dependency on Russian fossil fuel imports and lower the costs of non-fossil fuel energy sources, and these should eventually yield lower prices. It is doubtful they will ever fully match prices in the fossil fuel-rich US, even accounting for America’s underinvestment in its grid. But Europe could do much more to integrate its own electricity system – including building long-delayed connections between France and Spain and in the North Sea – and to manage demand, tax and regulatory policies to remain competitive as it makes the much-needed transition to cleaner energy. And in defence – beyond the unavoidable obligation to pledge increased resources at June’s Nato summit – a constellation of countries from Poland to the Baltics and from the UK to France seem to be prepared to enter into new industrial, planning and operational arrangements with each other. It is important that this approach does not get hijacked by legalistic debates about the role of EU and non-EU countries given the vital contributions that British and Turkish industry can make.
The prize – an orderly ramping up of European capabilities as the US ramps down its European commitment in favour of the Pacific – requires an entirely fresh look at how defence and intelligence cooperation is organised.
This raises another dilemma: if neither the EU’s institutions nor many of its policies are currently fit for purpose, nor is its membership. It is clearly unsustainable to have member states such as Hungary and Slovakia operating as cheerleaders for Putin’s belligerence, as they currently do. Routine disagreement among member states is one thing; actively seeking to aid and abet a declared enemy of Europe is quite another, especially when coupled with an expectation that European taxpayers should continue to pay vast EU subsidies into Hungarian and Slovakian coffers. At some point, these countries will need to choose (or the other EU member states will need to choose for them; the EU Treaty includes clear provisions enabling the suspension of voting rights): either remain as productive, if challenging, members of the club, or leave. Staying while hoovering up EU funds and disrupting the EU’s response to Moscow is not viable.
Arguably, the fastest change to both the composition and dynamism of the EU would be triggered by the rapid accession of Ukraine into the club. EU leaders have already committed to it in principle, though decades of the botched Turkish membership process suggests that foot-dragging could ensue. Instead, EU leaders should push ahead rapidly – Trump and Putin might be able to veto Ukraine’s Nato membership, but they should not be allowed to block Ukraine’s manifest destiny as a full member of the EU. While of course there are technical, political and legal conditions to meet, Europe would be significantly boosted by Ukraine’s defence and technology prowess, and by its vast resources (assuming they are not all part of the US administration’s rare earth minerals deal). The choice in favour of Ukrainian membership has been made. It must now be acted on with urgency. Britain’s recent experience casts the consequences of such a choice in stark relief.
The historical folly of Brexit has now delivered the worst of both worlds to the UK: out of the heart of Europe, while plaintively pleading for special favours in Washington.
British ministers repeat the familiar claim that London need not choose between Europe and America, that the UK can uniquely serve as a bridge between the two.
Meanwhile Brexiteers – unable for nearly a decade to point to any material benefit of their handiwork – laud the fact that Trump initially thumped the UK with lower tariffs than those imposed on the EU, as if receiving a lighter punishment beating from a bully is an act of great statecraft. The truth, of course, is that geography has long chosen for Britain – it is on the European not American side of an ocean – as has the manifest departure by the Trump administration from the key tenets of British foreign policy. Britain trades vastly more with Europe than with the US, and will continue to as long as geographical proximity remains the key determinant of international trade.
If not now, at some point the nature of the transatlantic rupture will require the UK to do exactly what its government refuses to: make a choice about where its strategic interests overwhelmingly lie. At that point, an obvious realignment of the EU’s membership could take shape: a new European defence union with Britain, in return for Britain’s participation in the core trading arrangements of the customs union and single market. This could include new guardrails governing the current expansive requirements on free movement (the debate about the movement of people across Europe – even in the passport-free Schengen area – has changed significantly since the Brexit vote). For Europe this would heal a breach which has grievously weakened the EU; for Britain it would represent not a return to the EU of old but a reassertion of Britain’s rightful place at the heart of a significantly reformed union with both Ukraine and Britain as new members. Popular support for such an outcome – as America turns in on itself and against its erstwhile allies in Europe – would be overwhelming.
Meeting these overlapping challenges – reforming decision-making arrangements, developing new capabilities, deploying hard, not just soft, power, building autonomy from the US, and rejigging who is part of what in Europe – will take at least a decade to get right. Adapting to the collapse of the Bretton Woods arrangements is not an overnight job. Doing so in a ramshackle continent with countries pulling in different directions will not be easy, neat or instant. But it must – and can – be done.
Fortunately, things can change quickly with a few levers. Boosting risk capital by finally completing the capital markets union is a clear opportunity. It will let Europeans put their savings to work while contributing to Europe’s competitiveness and independence – and give the next generation of its entrepreneurs a reason to build at home. Sweeping away the remaining barriers to the digital single market – so that Europe’s startups can build services at scale – is just a question of political will. So, too, is turning the trickle of Europeans already returning from Silicon Valley and Asia into a full-blown reverse brain drain with the right immigration, startup and tax incentives. A welcoming immigration policy for scientists in particular is crucial.
This will involve a degree of decoupling from the heavy dependency on US technology, especially in critical areas such as cloud infrastructure. It is common sense that EU governments and businesses cannot be expected to rely on infrastructure for AI deployment which is subject to US data surveillance provisions.
The US government would never subject US citizens to foreign surveillance powers embedded deep in their tech stack – and Europe clearly can’t either. Deep co-operation in sectors of strategic importance is one of the foundational insights of European integration. It was this realisation that informed the creation of Euratom, and the European Coal and Steel Community in the 1950s – precursors to the Union itself. Today’s strategic equivalent is technology, especially AI. Securing it against foreign control through sovereign local infrastructure and support for open source software may be temporarily disruptive, but is essential for Europe’s long-term independence.
Europe can play to its strengths. It will never be a unitary state like the US, with a common language and a fully realised internal market, or a command economy like China with the singular strategic focus that enables. But it has 100 million more people than the US, comparable GDP measured by purchase power parity (larger, if you include the UK), the most liveable cities on the planet, high-level manufacturing including silicon lithography and precision machine tools, and world-leading pharmaceutical, biotech, chemical, and aerospace industries. Its citizens enjoy the dividend of decades of investment: they largely live healthy, free and long lives in democratic societies. This has been possible thanks to the largesse of others, especially the US, whose security guarantees have underpinned Europe’s social spending, but also to a strong, if ill-defined, attachment to European values in the postwar era.
One of the few benefits of the situation Europe finds itself in is the unavoidable clarity it brings. We are in the midst of a wholesale redrawing of the shape of the west – as profound a shift as the fall of the USSR. As a lifelong Atlanticist, it is heartbreaking to observe that many Europeans currently see America as a threat to their way of life. This would have been unthinkable when I was a party leader and UK deputy prime minister. Back then, no one questioned the underlying glue of the Atlantic relationship. But the US administration has made its decision and set its course. There’s little merit in moaning about it. The essential task now is to keep up momentum on both the short and long term efforts needed to secure Europe’s independence. In a sense we must go back to the beginning: Europe’s founders recognised that political stability would be impossible without economic integration. That basic calculus – this time with technological innovation and defence integration at its heart – remains the same.
The EU’s first age was defined by its unlikely formation; the next by the expansion of its powers. Now it is time for the third act: securing its independence. There are considerable risks to come. But in 25 years the EU will be preparing for the centenary of the Schuman Declaration. What a gift it would be to celebrate knowing that the vision that generations of Europeans have held to has been sustained – that the continent and its people remain strong, free, and independent. Now we must do what Europe has done so many times before: rebuild and reform, because the contribution an organised and living Europe can bring to civilisation is still indispensable.
Nick Clegg worked for the European Commission and as a member of the European Parliament, 1994-2004. He was deputy prime minister, 2010-2015, and president of global affairs at Meta, 2018-2025
Photographs: Getty, Gerard Malte/AFP,Getty
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