Just a few months ago, how much the new unity of the West was being invoked. The rapid reaction of the EU and the US after the attack on Ukraine. Sanctions, arms deliveries, solidarity with the refugees.
But now, at the end of this year of historical turning points, it is becoming clear how deep the crisis Europe is stuck in: both economically and politically. A few days ago, EU chief diplomat Josep Borrell put the situation in a nutshell: “You – the USA – take care of our security. You – China and Russia – laid the foundation for our prosperity,” he said in Brussels. “This is a world that no longer exists.”
It is a different world that we are heading towards, one that is threatening for Europe: a bitter struggle for economic and technological hegemony has broken out between the two superpowers, the USA and China, which has just reached a new level of escalation when the US government imposed an embargo on high-performance chips issued.
Yes, the USA and the EU are working together in the Ukraine war and trust each other, as our title explains, but economically the USA cares little about the Europeans’ compulsion to act. In China, on the other hand, from now on only men who are loyal to President Xi Jinping will sit on the top management body. Xi will not tolerate dissent and is likely to keep his country on a collision course with the West.
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Europe is in danger of being crushed economically between the two superpowers. Because large parts of the growth in recent years were based on the good trade relations with China – this applies in particular to Germany.
Trade under strict safety precautions
Now there is little doubt that the People’s Republic will continue to grow in the future. At the same time, however, the country is more aggressively pursuing its strategy of technological independence. European companies are feeling increasing pressure from the regime in Beijing to relocate sensitive parts of their high-tech production to China. The situation is so serious that even German secret services are dealing with it.
Therefore, even more will apply in the future: trade with China, yes, but under strict security precautions for the critical infrastructure in Europe. That should also be the tenor for Chancellor Olaf Scholz’s talks in China. Quite a few in Berlin expect that the USA will give European companies a choice in the next few years: “either with China or with us”.
How seriously large corporations in Germany take such scenarios is shown by mental games of splitting up into independent units, into a Chinese and a Western part. The answer to this can neither be to follow the Americans without will, nor to continue eastwards.
The future for Europe is: Europe. The EU internal market is the largest common economic area in the world, more than 1.4 million scientists and researchers work here, and many companies serve markets all over the world from Europe.
The economy minister has put a major industrial strategy into play.
(Photo: dpa)
Europe must clarify in which fields prosperity is to arise in the future, and these future fields must then be developed. Economics Minister Robert Habeck made a move in this direction in an interview with the Handelsblatt when he brought up a major industrial strategy that would help the economy transform.
But the debate must go further: there needs to be clarity about the sectors in which Europe has a chance in the technology competition between the superpowers – and then a strategy for how a leading position can be built up here, namely with excellent research, capital for young high-tech -Companies, networks between young and established companies, a competitive tax system and yes, also low electricity costs.
In addition, Europe must advance its trade policy. Australia, Vietnam, India – it is completely incomprehensible why the EU has not ratified trade agreements with these countries long ago. And thirdly, such an innovative industrial policy also includes raw material partnerships – in order to reduce dependence on China, for example.
Without such a policy, Europe threatens to become an economic colony of the USA or China, a sales market for data products and high-tech of all kinds. And that would be the path to political insignificance.
However, the truth is that Europe is giving a sad picture these days: there is the rift between Chancellor Olaf Scholz and French President Emmanuel Macron. Anti-German resentments in the Polish election campaign. The sharp criticism from southern Europe of the German energy policy.
At the end of this historic year, Europe is faced with the question of whether it wants to play in the competition of the great powers or end up as a pawn. We still have a choice.
More: Federal government wants to allow takeover of German chip factory Elmos – warn secret services