The elites who currently control federal power in Washington have the wrong view of Europe. The document they have just published on the National Security Strategy (ESN) unacceptable and unfoundedly criticizes the majority of European leaders. Furthermore, it ignores that an economically strong and united Europe is, in particular, a fundamental commercial and financial partner for the well-being and stability of both sides.
From a commercial point of view, exchanges with Europe in terms of goods and services far exceed any other US bilateral relationship. They focus on technologically advanced products and sectors, of vital importance for both economies and with a huge impact on their respective employment rates. Furthermore, cross-investments between one side and the other, made by companies with European headquarters in North American branches and vice versa, known as Foreign Direct Investments (FDI), contribute to deep transatlantic economic integration. European companies increasingly invest in various sectors of the American economy, projecting Europe’s figures to almost half of total foreign investment in the United States. Let’s imagine what would happen if part of this amount was diverted by Europe to other economies. In principle, I do not foresee that this could happen, despite the deeply distorted, even absurd, assessment that the new strategy makes of European policy and Washington’s adoption of a whole series of other obstacles.
From a financial perspective, a significant share of US federal debt is financed by EU and UK capital markets. The American administration lives beyond its means, like many others. It constantly issues notes and public debt obligations to keep civil and military institutions functioning. The big difference in relation to other states is that American debt securities are mostly acquired by central banks and foreign investment funds. They are considered to form an essential part of the sovereign reserves of the vast majority of States.
Japan, first and prominently, and China, second, are, as individual countries, the main holders of American Treasury bonds. China is followed very closely by the United Kingdom. But the British portfolio added to that of the EU far exceeds the sum of the titles held by Japan and China.
Let us now imagine that the EU, following a decision by the European Central Bank, naturally supported by the central banks of the euro zone, reduced, even slightly, the purchase of new American bonds and simultaneously placed on the market a small part of those it currently holds, in order to diversify its foreign exchange reserves and to reinforce the position of the euro as a global reference currency. The EU could buy more Swiss francs, British pounds, Australian dollars, currency from the Persian Gulf countries and yen from Japan. An initiative of this type, carried out in a very gradual manner, could not be presented as an act of hostility. It would be announced as a prudent risk diversification measure and an essential step towards European financial autonomy. Nor should it be mentioned as a reaction to what was written in the ESN, but simply as a decision to adapt European reserves to new geopolitical realities. And also, as a process that would increase the relevance of the euro on the international scene. The euro is the second most important reserve currency in the world, but its role falls short of the Union’s economic weight.
All this bearing in mind the affirmation of European interests, following the expression that is now part of everyday politics in the USA, America first. Following this philosophy in Europe, each partner would address its advantages, but always within a complementary political framework. Europe must continue to see the US as an ally, even as it insists on the need to rethink its strategic autonomy and defend its value system.
Regardless of what was left out on ESN, frequent conversations with President Donald Trump must be considered essential. I don’t know if Trump read the new document that his collaborators or others produced. In any case, your politics are very unique, entirely personal.
What was written above about the complementarity between American and European interests must be repeated as often as possible to the leader of the White House. The real enemy of both, particularly in Europe, the North Atlantic and the Arctic, is the regime of Vladimir Putin. That is the message, regardless of what opinion one may have of Trump. If Putin destroyed or captured Ukraine, he would move on to the next phase as soon as possible, the destruction of other European states. Trump needs to understand that if this were to happen, the negative impact on his own country would be enormous. The story of this brand new era began with the Russian invasion of Ukraine. It cannot end the suffocation of our values or the rupture of the alliance between Europe and the USA.
International security advisor.
Former UN Deputy Secretary-General