Europe needs a plan for decoupling from America

{"text":[[{"start":null,"text":"

"}],[{"start":8.49,"text":"When the US-Russian “peace plan” for Ukraine was sprung on an unsuspecting Europe two weeks ago, Ukrainian President Volodymyr Zelenskyy warned his people in a speech: “Right now, Ukraine may find itself facing a very tough choice. Either the loss of our dignity or the risk of losing a key partner.”"}],[{"start":28.89,"text":"If any EU leaders were as plain-speaking as him, they might well have used the same words about their own countries. For it is all of Europe, the EU and its member states who are facing the choice between being in control of their own affairs, and their long-standing partnership with the US."}],[{"start":48.22,"text":"Three times Donald Trump has tried to bounce Ukraine into conceding to Russian demands for the sake of a superficial and unjust peace. Three times the Europeans have scrambled to change the US president’s mind on something they rightly see as existential. How many more lessons do they need to conclude that the transatlantic relationship is over?"}],[{"start":72.7,"text":"Accepting this does not make it always wrong to seek common cause with Trump where possible, or unnecessary to cajole him into changing stances in Europe’s favour. But it does mean taking seriously, in the words of EU commissioner Teresa Ribera, “whether the EU remains a rulemaker or becomes a rule-taker in a system shaped elsewhere” — or indeed a supplicant in a world without rules at all."}],[{"start":102.53,"text":"To avoid this fate, Europe must seek to make itself minimally vulnerable to US pressure that will not stop coming. It is time for a European policy plan for EU-US decoupling with steps to minimise the harm Maga America is able to inflict on Europe."}],[{"start":122.07,"text":"Such a plan must cover at least three areas: trade, finance and defence. "}],[{"start":128.37,"text":"Take trade first. Last summer the EU agreed a “deal” with the White House, which in effect endorsed Trump’s violation of global rules and accepted large tariff rises on EU exporters, ostensibly in the hope of avoiding something worse. European publics reacted with humiliated fury."}],[{"start":151.8,"text":"Whatever the short-term merits of giving Trump the thumbs-up, it should be abundantly clear that building one’s livelihood on US sales is ever more of a liability and less of an advantage. The liability is not limited to European exporters who may find themselves locked out of markets the next time the White House wants to extort something. The spillovers would extend to the governments and entire economies of the suddenly kneecapped companies — because of the people they employ, the critical goods or services they provide, or the political influence they otherwise wield."}],[{"start":190.10000000000002,"text":"The case is strong, then, for a conscious policy of reducing trade exposure to the US below what private companies will do by themselves. Merely stating a political goal of disengaging economically from the US would send a powerful message to the private sector. Authorities could withdraw trade promotion incentives for exports to the US. Also, the next time Trump wants to raise tariffs, don’t resist it. Rather take the opportunity to target in retaliation US activities that intensify European vulnerability, such as some digital services. "}],[{"start":231.53000000000003,"text":"The second thing to address are Europe’s large exports of capital. They do not flow to America only, but the domestic financing scarcity they cause worsens European vulnerability to a hostile US. When leaders struggle to fund necessary public and private investments, and Europe’s best and brightest move stateside to finance their companies’ growth, the EU should not be sending up to half a trillion euros’ worth of net savings outside the bloc every year."}],[{"start":265.83000000000004,"text":"This may require leaning against individually rational decisions to invest outside rather than inside Europe. But again, these private decisions do not take into account the economic and geopolitical cost of leaving Europe underinvested. Strategic regulatory tweaks to tilt the playing field from foreign to domestic placements would shrink Europe’s savings-investment gap, in particular by making funding more plentiful for European capital needs."}],[{"start":299.53000000000003,"text":"Finally, Europe needs a homegrown alternative to the strategic military capabilities for which it now depends on the US. Economists Philipp Hildebrand, Hélène Rey and Moritz Schularick have developed a framework for common European financing by a coalition of willing countries to build self-sufficiency. The blueprint is circulating at the highest levels in France and Germany. It is to be hoped that they, and other countries, rally behind it fast."}],[{"start":333.02000000000004,"text":"Europe’s dependence on the US is not a given, but the learned helplessness of 80 years. Unlearning it must start now."}],[{"start":350.49,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1764651211_3278.mp3"}