James Green / Feb 2026
Image: Shutterstock
US President Trump believes Europe is facing civilisational erasure, European leaders are weak and unable to protect Greenland, and Europe has bankrupted its industry with windmills. I disagree with all of the above. In fact, I disagree with nearly everything Trump has said about Europe, yet one sentiment in his world-order-shifting rhetoric holds some truth. At the World Economic Forum in Davos, Trump said, “we want Europe to be strong,” echoing an earlier interview with Politico.
But a strong Europe is not what Trump imagines.
He wants far-right parties and nationalism to reign, to reverse European integration and to erode its common market and institutions, and the continent to give up on renewable energy. It’s a recipe for the balkanisation of Europe into a collection of small and medium countries vulnerable to US coercion – and dependent on its gas.
Europe retains vital strengths. The bloc derives its power from its 450 million-strong single market, the monetary stability that stems from the fierce independence of the European Central Bank, its commitment to democracy and rule-of-law, and the talent of its people. In pursuit of Trumpian pipe dreams of sovereignty and deregulation, the UK left the EU and single market and ended up losing between 4 and 8% of GDP in lost trade and investment.
The efforts of Montenegro, Ukraine, Moldova and others to join the EU demonstrate the continued draw of both the bloc’s values and promise of prosperity.
But Trump, who has a sixth sense for weakness, is right about one thing: Europe’s economic dynamism is waning. To realise its full potential, Europe must recover from anaemic growth and become a place where businesses can more easily start, scale and thrive.
The meeting of European leaders on 12-13 February dedicated to strengthening the single market, which will include both Mario Draghi and Enrico Letta, is an indispensable opportunity to do just that. Completing the single market for services, capital and energy would enable the growth European leaders and their communities need to support and protect themselves.
Current and upcoming EU proposals, such as a 28th regime for pan-European incorporation structures, have the potential to ease regulatory compliance for European businesses and facilitate the creation and growth of innovative firms. Nonetheless, these changes largely remain proposals. Meanwhile, the EU’s innovation performance actually declined from 2024 to 2025 and analysts expect another year of weak economic growth across the bloc.
European leaders have failed to move forward with the most consequential policy solutions that address difficult, but fair questions on how to truly tackle the market and capital fragmentation that hold the bloc back. Yet the opportunities remain immense. The ECB has found that if EU countries were to lower their internal trade barriers to those of the Netherlands, it would unlock four times more growth than what analysts expect the EU to lose from U.S. tariffs. Survey data also shows that the European people strongly support a more united EU and focus on the economy and affordability. Next week, European leaders must seize the opportunity.
Economic success is vital for its own citizens, and for the world, perhaps more so than ever. A higher growth rate would enable Europe to maintain the high quality of living many of its citizens enjoy, underpinned by a strong social welfare system. With a strong economy, Europe can more easily continue to fund the Ukrainian people in their gruesome battle against Russian aggression and cruelty. It can strengthen its defence capabilities to protect its peoples from further great power aggression, and collaborate with like-minded partners across the world.
An economically strong Europe can also drive forward decarbonisation, which will not only benefit European natural landscapes, public health and green industries, but underwrite global climate ambition and clean energy adoption.
Finally, as the UK and the US slash development aid, an economically strong Europe would be one of the last bastions able to fund projects to protect democracy, combat corruption and uphold individual liberties abroad. Europe’s role as a beacon for liberal democracy is especially important amid democratic backsliding worldwide and mounting attacks on individual freedoms — from Iranian protesters gunned down by their own government to forced labour in Xinjiang.
To deliver on these goals at the scale and speed required, Europe must relentlessly pursue policies that lift economic growth — above all by simplifying regulation and strengthening the single market. EU leaders have been consumed by managing Trump and wider geopolitical turbulence, pushing the growth agenda to the back burner. But growth is not a distraction from Europe’s strategic challenges; it is the precondition for meeting them. Without stronger growth, the EU will struggle to generate the tax revenues needed to invest in defence, sustainability, democratic resilience and innovation. When EU leaders meet later this week, much more than short-term crisis management is at stake.
