Europe edition
Hello readers,
This is a late and short dispatch; it’s been a very long week in crises. Below are a few thoughts what the US-Europe hostilities in Munich might mean for defense and energy; China’s internationalist pitch at the same conference; and India and Argentina’s US trade prospects. We’re looking at Europe in more depth for our next Polycrisis/Phenomenal World newsletter.
- Kate & Tim
The past few days many world leaders have been at the Munich Security Conference; not exactly “multilateral” but a good sense of where geopolitics are at.
European leaders probably expected JD Vance to use his speech in Munich to rail against Europe for not spending more on defense; Von der Leyen announced she’ll seek to activate the “escape clause” on EU fiscal rules, to suspend the spending restrictions to allow for more defense spending.
What perhaps wasn’t expected was Vance accusing Europe of being a hotbed of authoritarianism for excluding the far-right AfD from the conference.
Back in August, we wrote that Europe faces several dilemmas with regard to the outside world:
1. Domestic centre-right courting far-right, fascists
2. Orientation with US
3. Relationship to & orientation with China
4. Relationship to & orientation with the South
Trump was already looming on the horizon back then:
"Except for transatlantic tragics in Germany, there are few illusions in European capitals that a Trump White House would be hostile to both NATO and the EU project through tariff wars. What they have been doing is ramping up national defence budgets (Biden boasted at the NATO Washington summit in July: “When I began just nine countries were spending 2% on defense. Now 23 countries are now spending 2% on defense")."
There are certainly no illusions at all now, with Vance’s speech confirming the US wants to weigh in on domestic politics as well as the sensitive NATO defense arrangements. Friedrich Merz, the likely new German chancellor, said the Trump administration was “interfering quite openly in an election”. Germany’s defense minister, Boris Pistorious, reportedly was heard declaring “this is unacceptable” in the audience during Vance’s diatribe, and quickly rewrote his own speech, delivered a couple of hours later, to angrily reject the characterisation of Europe.
What will this mean for Europe’s use of the key bargaining chips for foreign governments dealing with Trump: purchases of US arms and US fossil fuels? Just as the Trump administration is hoping for a big expansion in LNG exports, Europe’s incentives to buy from the US are fading.
While Europe’s gas pipeline imports from Russia have fallen away, its imports of Russian LNG rose significantly last year, and European leaders have reportedly been discussing buying more Russian LNG after the Ukraine war ends.
China’s internationalist offer
China’s top diplomat, Wang Yi, told the conference in Munich that China was willing to continue to deepen its commitment to “true multilateralism”.
China, he said, stood ready to “synergize” with the Europe’s “Global Gateway” Strategy. He emphasised China’s commitment to multilateralism and providing global public goods, via its Global Development Initiative, Global Security Initiative, and Global Civilization Initiative.
Is this a kind of extension of the Belt and Road Initiative? A new projection of benign green internationalism, as is often hoped?
The core goals for China with these programs (GDI, GSI, GCI) are oriented towards markets and formal international power. This long 2023 FT story about the three initiatives says:
…the aims of this strategy are largely two-fold: to ensure that a broad swath of the world remains open to Chinese trade and investment and to use the voting power of developing countries at the UN and in other forums to project Chinese power and values.
That’s been successful already; countries that are “Friends of the Global Development Initiative” (many are also BRI recipients) have largely voted with China on UNGA resolutions, including one on China’s human rights record.
Being on side doesn’t help
While governments around the world are grappling with the Trump administration, it might be worth noting that the transactional Trump doesn’t care for professed loyalty: Argentina won’t do well from the US tariffs, despite Milei’s admiration for the Trump / Musk regime. India’s Modi made several concessions on tariffs and committed to buying more fighter jets and energy from the US; but still has to do more to avoid onerous retaliatory tariffs.
That’s all for this week. Please forward this and share the link! You can email us here: Kate and Tim