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Betting on market and soft power alone is also “shallow and narrow.”
By Thorsten Benner, Director, Global Public Policy Institute
In February this year, an Indian investor told me during a conversation, “Germany or EU are irrelevant on the geopolitical chessboard… Hard power, economy, and independent foreign policy matter.” He went on to assert that India is a “great power, ranking above the EU and Germany in this era.” His tone echoed that of U.S. president Donald Trump, who famously dismisses those he considers inferior— “You don’t have the cards.” For Europeans in general and Germans in particular, this is a useful cold shower.
For decades following the end of the Cold War, Germans have bet on being a “civilian power” at the heart of “normative power Europe.” Twenty years ago, Mark Leonard, co-founder of the think tank European Council on Foreign Relations, published Why Europe Will Run the 21st Century, which epitomized these hopes. It argued that the military-focused expression of power by the United States is “shallow and narrow,” whereas “Europe’s reach is broad and deep, spreading a value system from Albania to Zambia.” Five years ago, another book, The Brussels Effect: How the European Union Rules the World, celebrated Europe’s regulatory “superpower.”
It is clear now that this dream is over. Betting on market and soft power alone is also “shallow and narrow.” Europeans are discovering this the hard way as they deal with the realities of today’s world shaped by great powers that throw their weight around, seeking to dominate those who “don’t have the cards.” Not only do Germany’s and Europe’s models of social market economy and liberal democracy need to defend themselves against illiberal forces from within, such as the far-right Alternative for Germany (AfD) party, they must also learn to survive and thrive in a competition of systems with Trump’s U.S., Xi’s China, and Putin’s Russia. Trump, Xi, and Putin are united by seeking predatory hegemony over what they perceive to be less powerful players, including Europeans.
The task for the next German government, led by Friedrich Merz, who will likely be sworn in by May, is clear—organize Germany’s and Europe’s self-assertion in a hostile world, where the law of the strongest prevails and where the powerful laugh at German and European self-images as a “civilian power” and “normative power.”
It is good that the likely next chancellor, Friedrich Merz, stated right after his election victory, “My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the U.S.” He said it was unclear whether by the time of the NATO summit in June “we will still be talking about NATO in its current form or whether we will have to establish an independent European defense capability much more quickly.” The fact that Merz pushes for Germany to engage with France and the UK to engage in nuclear sharing as a Plan B for the U.S. nuclear umbrella is a sign that he has understood the seriousness of the situation. Merz also reversed his fiscal policy stance and accepted that Germany needed to make changes to the country’s debt rules in order to mobilize the necessary funding to reinvest in deterrence. Due to a recent constitutional change passed by Parliament, there are now no limits on debt spending for defense. The challenge now is to enable all EU members to make the necessary investments in deterrence and resilience.
Faced with Trump’s trade war, Europe needs to defend its interests. However, it would be naive to see a pivot toward Beijing as a response to Trump’s aggressive stance vis-à-vis Europe. On the contrary, Germany needs to decisively reduce its dependencies on China in terms of supply chains and deal with the looming “China Shock 2.0” threatening Germany’s core industries from automotive and chemicals to machine tools. Berlin must orchestrate protective measures within the EU to safeguard European core industries rather than sabotage them. Germany must learn that being an “export world champion” is a high-risk strategy in a world where the governments of both China and the U.S., the largest markets outside Europe, promote their own industries at the expense of global competitors. It must rely more on domestic demand in Europe and take decisive steps to tear down the still excessively large barriers in the EU internal market.
It is in the German and European self-interest to diversify partnerships and invest in relations with the Indo-Pacific. India is of crucial importance in this context and is a good potential counterpart in this new world—it has a sober view of the global political environment, eschews permanent alliances, and seeks to pursue purely interest-based cooperation. There are several interest-based areas of cooperation that Germany, Europe, and India can pursue without any illusions, from defense and security to technology and the energy transition. Both European and Indian markets are large and attractive. Done right, bringing the two markets closer together is in the interest of both. Germans should increase their curiosity about advances in India and learn from Indian successes, for example, in the field of digital public infrastructure. We should invest more in exchange and dialogue among parliamentarians, researchers, and think tanks. The Robert Bosch Foundation Global Dialogue Program organized by German, Australian, and Indian think tanks to facilitate parliamentary exchange is one example how to go about this. I have been fortunate to be able to co-organize this program and learn from interacting with many Indian counterparts. I look forward to participating in the Carnegie Global Technology Summit in Delhi next week, a valuable forum for exchange and learning. Maybe that Indian investor who thinks Europe is irrelevant on the geopolitical chess board will also be able to follow some of the debates. And maybe he will discover that however embattled, Europe still has a few cards to play.
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This article is part of a series exploring “Sambhavna”—opportunities in technology, the theme of Carnegie India’s ninth Global Technology Summit, to be held from April 10-12, 2025, with public sessions on April 11-12, co-hosted with the Ministry of External Affairs, Government of India. For more information about the summit and to register, visit https://bit.ly/JoinGTS2025AN.
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