A businessman’s observation on the cost of US-EU relations, with special reference to the EU’s losses
- From an economic perspective, the current model of relations between the EU and the US can be described as asymmetric interdependence. The US has more flexibility to initiate or escalate conflicts, while Europe has greater exposure to the consequences. It creates a situation in which the risk is European and the strategic control is American
The statement of the president of the European Commission, Ursula von der Leyen, about the loss of 25 billion euros within 54 days, opened a serious debate in European political and economic circles. Namely, is the European Union paying a disproportionately high price for the geopolitical moves of the United States of America.
This case is not an isolated incident, but part of a wider trend that has been developing for years. And it is the gradual transfer of economic and security costs from Washington to Brussels, which is identified with Brussels projects named “Strategic Autonomy of Europe”.
US-INDUCED ENERGY SHOCK EXPOSES EUROPE’S SYSTEMIC PROBLEM
The energy crisis that followed the Ukrainian-Russian conflict is a story in itself. But the energy crisis following the escalation in the Middle East following the US aggression against Iran has again emphasized Europe’s vulnerability. The increase in prices without consumption growth shows that the EU is exposed to external shocks on which it has a minimal impact.
The problem has been deepened by the strategic decision to diversify away from Russian gas, which, although politically motivated, has created a new dependence, which is Europe’s dependence on more expensive liquid natural gas, mainly from the United States.
The average price of LNG imported into Europe remains significantly higher than previous long-term contracts with Russia, which puts the European industry at a disadvantage in global competition.
THE TRADE IMBALANCE IN THE US-EUROPE RELATIONSHIP: A PARTNERSHIP THAT GROWS UNDER PRESSURE
Trade relations between the EU and the US have acquired a different dynamic in the last decade. Policies initiated during the administration of Donald Trump have transformed trade into an instrument of geoeconomic pressure.
Threats of tariffs on European cars, subsidies to US industry and protectionist measures have created asymmetric conditions.
European companies face two pressures: higher production costs at home and limited access to the US market.
It led to a gradual redirection of investments, that is, some of the European corporations start investing directly in the United States to avoid trade barriers.
FINANCIAL EROSION AND INFLATIONARY PRESSURE
Energy and trade shocks have direct financial consequences. Rising energy prices fuel inflation, which forces central banks to keep interest rates higher.
It slows down economic growth and reduces the purchasing power of citizens.
At the same time, governments are forced to introduce subsidies and fiscal measures to mitigate the consequences, further straining budgets.
Practically, European taxpayers pay double! First through higher bills, and then through state interventions!
THE SECURITY PARADOX OF “BIG BROTHER”
Although the US remains a key security partner through NATO, the latest geopolitical moves open up a dilemma: is European security becoming hostage to US global strategies.
Conflicts in which Europe does not directly participate – such as the escalation with Iran – still have direct economic consequences for European countries.
At the same time, pressure to increase military budgets means that Europe must invest more in defense, often buying American military equipment.
It creates an additional financial outflow to the US instead of developing its own defense industry.
STRATEGIC AUTONOMY OR STRUCTURAL DEPENDENCE
The concept of “strategic autonomy” is increasingly mentioned in Brussels, but its realization is limited.
Europe remains dependent in three key areas:
– energy
– security
– high technologies
In all three segments, the US has a dominant position.
This dependence limits the EU’s ability to conduct an independent policy, especially in crisis situations.
GEOPOLITICAL ECONOMY OF DEPENDENCE
From an economic perspective, the current model can be described as asymmetric interdependence.
The US has more flexibility to initiate or escalate conflicts, while Europe has greater exposure to the consequences.
It creates a situation in which the risk is European and the strategic control is American.
Dissatisfaction with this dynamic is growing within the EU.
Some member states are seeking greater energy independence, strengthening of the European defense industry and rebalancing of trade relations with the United States.
However, there is also the fear that a too harsh course towards Washington could threaten the security umbrella of NATO.
THE PRICE OF THE ALLIANCE
The analysis of the current situation shows that Europe is in a complex position. It is economically exposed, politically limited and security dependent.
The €25 billion announcement is just the latest indicator of a deeper structural problem. Now Europe is in question not about whether the EU should remain an ally of the USA, but under what conditions?
If the current model continues, the EU risks becoming an economically peripheral actor in a system where it pays the costs but does not make the decisions.
In that sense, the debate on strategic autonomy is no longer ideological, but the EU leadership from Brussels imposes the issue as an economic necessity. Initiatives are heard from there that Europe will have to choose between two directions at the crossroads. It is to stay within the existing model or to redefine it.
Otherwise, the price of the transatlantic partnership will continue to grow, at the expense of European citizens, say high-ranking EU officials, who are still speaking anonymously, to relevant German media.
Author: Done Prentoski, permanent collaborator of “Nova Makedonija” from Germany
The author is a businessman and investor who lives in Germany and works on the Germany-Macedonia relationship
