Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
The writer is a former prime minister of Italy, president of the Jacques Delors Institute and a dean at IE University
Donald Trump’s actions in his second term make clear that we are dealing with a long-term strategic vision that aims to reshape America’s global role, weaken multilateralism and increase pressure on allies, especially Europe.
The US president is pursuing an agenda that forces the EU to face an urgent reality: it must strengthen its autonomy and capacity to act. Paradoxically, Trump’s challenge offers an unprecedented opportunity for Europe to do just that. It could be the catalyst that drives deeper integration and a stronger, more decisive EU.
This EU must begin by fully leveraging its two most powerful assets: the single market and the euro.
The single market has given Europe economic weight and resilience, but it remains incomplete. In a world of continental powers and economic blocs, no single EU member state can act alone. To navigate today’s geopolitical storm, we must scale up and build a truly European market, starting with finance, energy, innovation and, yes, defence.
Without scale in these domains, Europe risks becoming an economic colony. This is not a theoretical danger: Europe increasingly depends on foreign platforms for digital infrastructure, on non-European investors to finance its industrial base and on external powers for energy and military protection. The risks here are political as well as economic: this dependency constrains our ability to act in our own interest, leaving us vulnerable to decisions made elsewhere.
The immediate priority is to unlock the full potential of the single market, starting with completing integration in financial markets. Europe is a capital-rich continent that, paradoxically, underinvests in itself. Each year, billions of euros in household savings flow out of the EU, and much of that capital lies idle in low-yielding deposit accounts.
These resources must be mobilised in pursuit of our own strategic goals. A single European capital market would channel European savings towards European businesses, enhancing innovation, the green and digital transitions and industrial competitiveness.
Achieving this goal requires, alongside national efforts, a coherent European strategy focused on concrete policies: the creation of attractive and secure pan-European savings products; consolidation of trading and post-trading infrastructures; centralisation of supervisory powers for cross-border activities; alignment of insolvency, tax and company laws, as well as the establishment of what European Commission president Ursula von der Leyen has called a “28th regime”, a single regulatory framework across the EU; globally competitive asset managers; and a stronger ecosystem for scale-ups.
In short, the proposed savings and investments union — which was a central pillar of my report Much More Than a Market — offers a comprehensive policy framework to deepen EU capital markets. To implement it, we should introduce the binding deadlines that worked for the creation of the euro, for example by fixing July 1 2027 as the starting date.
We must also do more to realise the full potential of the euro. Nearly 20 per cent of global reserves are held in euros, but the lack of a genuine European safe asset and fragmented financial markets limit its role. As Christine Lagarde, president of the European Central Bank, has repeatedly stressed, strengthening the euro is key to Europe’s resilience. In a world in which economic power is increasingly weaponised through sanctions, trade restrictions and financial coercion, this is no longer just an economic issue — it is a question of sovereignty.
Amid growing uncertainty over the role of the dollar as the world’s reserve currency and global appetite for US Treasuries, Europe has a historic opportunity. Expanding the international role of the euro would enable the EU to reduce financing costs for both governments and businesses and to attract more investment. Recent initiatives such as NextGenerationEU, the Safe instrument for defence and the digital euro project have helped lay the groundwork for the emergence of a true European safe asset. Still, we must go further.
One more far-reaching idea is scaling up the market for supranational EU bonds significantly, not necessarily through new debt, but by gradually replacing part of national debt with common bonds. Global investors are actively seeking alternatives to the US Treasury market. A large, deep and liquid Eurobond market would meet this demand and provide the foundation for a truly autonomous European financial system.
The global order is being reshaped before our eyes. If Europe wants to remain a global actor, it must act now, together. Economic and financial integration is not an end in itself — it is the foundation of strategic autonomy.
As Jacques Delors once warned, Europe faces a choice: renewal or decline. Without bold action, current economic and demographic trends will push Europe towards marginalisation and irrelevance on the global stage. But this is not an inevitability. Political will and strategic vision can still make the difference. By building on our unique assets — our market and currency, our history and values — we can equip the EU with the tools it needs not just to resist decline, but to shape its own future with confidence and purpose.
