Former Fox News host Tucker Carlson recently met with Serbia’s President Aleksandar Vucic in Budapest, Hungary. During their conversation, Carlson highlighted the negative impact of the destruction of the Nord Stream pipeline on the European Union’s economy. He also mentioned that the conflict in Ukraine and the West’s support for Kiev were causing a “reset” in the world. These topics raise important issues that need further exploration.
One key issue to consider is the significant decline in the EU economy since the outbreak of the war in Ukraine. According to a Financial Times article titled “Europe has fallen behind America and the gap is growing,” the EU now heavily depends on the US for its technological, security, and economic needs. In 2008, the EU’s economy was larger than America’s, but by 2022, the US economy had grown significantly while the EU lagged behind. The EU is now over 50% smaller than the US in terms of GDP.
The article also highlights other areas where the EU falls behind the US and China, such as quality universities and a less favorable start-up environment. Additionally, the EU faces challenges in obtaining affordable energy, with European companies paying significantly more than their American counterparts. The conflict in Ukraine has worsened this situation, as energy from Russia is decreasing, factories are closing, and industry leaders are concerned about future competitiveness. A report by the European Council on Foreign Relations describes this situation as a form of “vassalization” of the EU.
The report identifies two main causes for this situation. Firstly, the transatlantic relationship has been unbalanced in favor of the US since the 2008 financial crisis, and the Biden administration intends to assert itself against a disjointed Europe. Secondly, the EU lacks a clear vision of what greater strategic autonomy would look like and does not have a process for deciding its future independently. As a result, the EU relies on US leadership.
This decline in the EU’s stature is occurring alongside the perceived decline of the US and the rise of China. Many commentators attribute the US decline to factors such as a less attractive environment for foreign direct investment, financial instability, corruption, and internal political turmoil. The EU’s issues, on the other hand, stem from its non-federal nature, with challenges ranging from migration to the banking crisis to the Covid-19 pandemic.
The report by the European Council on Foreign Relations suggests that the EU should leverage the transatlantic partnership in ways that benefit itself. This includes creating an independent security architecture within NATO, developing an economic NATO, and potentially pursuing a European nuclear weapons program. However, the EU should also diversify its economic portfolio and reduce dependencies by establishing peer-to-peer relations with the Global South. For example, ratifying the China-EU Comprehensive Agreement on Investment could provide market access in China and tap into a large consumer base.
In conclusion, the EU is facing significant challenges in terms of its economy and strategic autonomy. It relies heavily on the US, which has led to a decline in its status compared to the US and China. To address these issues, the EU should explore opportunities for diversification and establish stronger ties with the Global South. This would help reduce dependencies and fuel growth, allowing the EU to assert itself more independently on the world stage.