Europe Does Not Need Another Think Tank. It Needs to Become a Power.

The creation of the Rhine Group around Mario Draghi and Patrick Collison is presented as another attempt to confront Europe’s competitiveness crisis.

The intentions may be serious. The people involved are certainly capable. And the diagnosis is not wrong.

But I believe Europe is asking the wrong question.

Europe does not suffer from a shortage of economists, analysts, reports or think tanks.

Europe suffers from a shortage of political power, strategic unity and the ability to act as one.

This distinction is fundamental.

Mario Draghi’s 2024 report on European competitiveness already identified many of the structural problems that are holding Europe back. The European Commission itself says that the report has become an important basis for its competitiveness agenda and subsequent policy initiatives. (European Commission⁠)

So what exactly is another think tank going to discover?

Europe already knows that it needs more investment, greater productivity, deeper capital markets, cheaper and more secure energy, faster innovation, less bureaucracy and stronger European companies.

The problem is not the diagnosis.

The problem is execution.

And execution requires political authority.

The extraordinary paradox of Europe

Europe is one of the richest economic areas in the world.

The EU Single Market represents approximately 450 million consumers, 34 million businesses and around €18 trillion in GDP, making it the world’s second-largest economy according to the European Commission. (European Commission⁠)

Twenty-one EU countries now share the euro, used daily by more than 350 million Europeans. Bulgaria became the 21st euro-area member on 1 January 2026. (Economy and Finance⁠)

This is an extraordinary achievement.

Europe has created something that previous generations could barely imagine:

A huge internal market.

A common currency for most members.

Free movement of people, capital, goods and services.

Schengen.

European institutions.

A common regulatory framework.

A common central bank for the euro area.

And yet, when Europe enters the most important geopolitical questions of the 21st century, it suddenly stops behaving like one entity.

That is the paradox.

Europe has created economic integration without completing political integration.

And the world is now exposing the consequences.

America thinks strategically. China thinks strategically. Russia thinks strategically.

The United States is not simply a market.

China is not simply an economy.

Russia is not simply a military power.

They are geopolitical actors capable of combining economic resources, diplomacy, intelligence, military power, energy, technology and industrial policy around national strategic objectives.

The United States can change its foreign policy because Washington has one government, one president, one defence establishment, one intelligence community and one military command structure.

China can pursue long-term strategic priorities because Beijing operates through a highly centralized political system capable of aligning economic, technological, industrial, diplomatic and military objectives.

Russia, despite its economic limitations, possesses something Europe often lacks:

strategic concentration of power.

Europe has enormous economic resources.

But those resources are divided among national governments, national budgets, national political cycles and national strategic priorities.

This is increasingly dangerous.

Europe’s greatest weakness is not economic. It is political.

Imagine a crisis involving the United States, China, Russia or the Middle East.

Who speaks for Europe?

The President of the European Commission?

The President of the European Council?

The High Representative?

The German Chancellor?

The French President?

The Italian Prime Minister?

The Polish government?

The Nordic countries?

The answer changes depending on the issue.

And that is precisely the problem.

The EU formally has a Common Foreign and Security Policy. But the Treaty itself provides that foreign and security policy is generally decided by the European Council and Council unanimously, with important limitations where defence and military decisions are concerned. (EUR-Lex⁠)

A geopolitical power cannot function efficiently if its strategic decisions depend on finding agreement among governments with different historical memories, geographic positions, economic structures and domestic political interests.

Europe therefore frequently produces compromise where it needs strategy.

It produces declarations where it needs decisions.

It produces coordination where it needs command.

The North and the South do not always see Europe in the same way

This is another uncomfortable reality.

Northern Europe tends to approach European policy through the lens of fiscal discipline, competitiveness, security, Russia, NATO and the transatlantic relationship.

Southern Europe often faces different priorities: migration across the Mediterranean, energy costs, unemployment, public debt, relations with North Africa and the Middle East, maritime security and the economic consequences of instability in the Mediterranean.

Eastern European countries have their own existential concerns, particularly Russia and the security of Europe’s eastern border.

France has traditionally pursued the idea of European strategic autonomy while simultaneously maintaining a strong national conception of sovereignty.

Germany has historically placed enormous importance on industrial competitiveness, exports, energy and its relationship with both the United States and China.

Italy sits at the intersection of several of these realities: Mediterranean security, migration, energy, manufacturing, public debt, NATO, relations with the United States and its position inside the European core.

These differences are legitimate.

But they become a strategic weakness when national interests permanently override European interests.

The Trump question exposes the problem

The relationship with Donald Trump makes the European contradiction even clearer.

Europe needs the United States.

The transatlantic relationship remains fundamental to European security, trade, technology and finance.

But Europe cannot build its entire strategic identity around the assumption that Washington will always have the same priorities as Brussels.

The current American political direction has made this uncertainty impossible to ignore.

The United States is increasingly demanding that Europe assume greater responsibility for its own defence. A US review of American troop deployments in Europe has already generated uncertainty among European allies; the United States currently has roughly 80,000 troops stationed in Europe. (Reuters⁠)

This should not frighten Europe.

It should wake Europe up.

The correct European response is not to become anti-American.

Nor is it to become automatically pro-American.

The correct response is to become European.

Europe should be capable of maintaining a strong alliance with Washington while simultaneously possessing enough political, military, technological and economic power to defend its own interests.

That is what strategic autonomy should mean.

Being “pro-Trump” is not a European strategy

One of the most striking weaknesses of European politics is the tendency of individual governments and political movements to cultivate special relationships with the American president.

There is nothing wrong with maintaining good relations with Washington.

But Europe cannot have 27 separate American strategies.

One government cannot attempt to gain an advantage from Washington while another negotiates from a completely different position and a third government pursues an entirely different foreign-policy agenda.

That may generate short-term political benefits for individual capitals.

But it weakens Europe.

If one European government believes that its future depends primarily on Washington, another on Beijing, another on Moscow, another on Paris and another on Berlin, then there is no European geopolitical strategy.

There are simply national strategies operating under a European flag.

And that is not enough.

Europe needs one foreign policy

A serious European power should have a common foreign policy.

Not 27 foreign policies.

One.

That does not mean every European country must abandon its identity or historical relationships.

It means that when the strategic interests of Europe are at stake, European countries must speak with one voice.

Europe should have a unified diplomatic position toward:

The United States.

China.

Russia.

India.

The Middle East.

Africa.

Latin America.

The Indo-Pacific.

The Arctic.

Energy-producing countries.

And emerging strategic powers.

The objective should not be to become hostile to anyone.

The objective should be to ensure that European interests are represented by European power.

Europe needs a real European defence

This is even more urgent.

Europe cannot permanently depend on American military power while simultaneously describing itself as a sovereign geopolitical actor.

The numbers are revealing.

According to SIPRI, European military spending reached approximately $864 billion in 2025, a 14% increase in real terms from 2024.

The United States spent approximately $954 billion.

China spent approximately $336 billion.

Russia approximately $190 billion. (SIPRI⁠)

The numbers demonstrate something extraordinary.

Europe collectively spends enormous amounts on defence.

But it does not possess a single European military.

It does not have a unified defence procurement system.

It does not have a single European chain of command.

It does not have one defence budget.

It does not have one military industrial strategy.

It has national armies.

National procurement.

National doctrines.

National political decisions.

And different strategic priorities.

This is economically inefficient and geopolitically weak.

Europe should stop buying defence 27 times

If European countries collectively spend hundreds of billions on defence while maintaining fragmented procurement systems, Europe loses enormous economies of scale.

A European defence policy should mean:

One European defence industrial strategy.

Common procurement.

Common standards.

Common weapons systems wherever possible.

Integrated intelligence.

Integrated logistics.

Integrated air and missile defence.

Common cyber defence.

Common satellite capabilities.

Common military research.

And ultimately, a genuine European military structure.

NATO should not be seen as the enemy of this project.

Quite the opposite.

A stronger European pillar inside NATO would make the alliance stronger.

Europe should be capable of defending Europe.

And the United States should remain Europe’s ally — not Europe’s permanent substitute.

Energy is another example of Europe’s fragmentation

Energy policy demonstrates the same problem.

Europe discovered after Russia’s invasion of Ukraine how dangerous strategic energy dependence can become.

The EU has dramatically reduced its dependence on Russian gas: the European Commission says the share fell from 45% in 2021 to around 12% in 2025. (European Commission⁠)

But Europe has also become heavily dependent on global LNG markets.

In 2024, LNG represented around 40% of total EU gas supply, and the United States supplied nearly half of EU LNG imports. Russia still supplied around 21 bcm of LNG to the EU in 2024. (ACER⁠)

The lesson is not that Europe should replace Russia with America indefinitely.

The lesson is that Europe needs an energy strategy of its own.

Europe needs to combine:

Nuclear energy where politically acceptable.

Renewables.

Grid investment.

Storage.

Interconnections.

Hydrogen where economically viable.

LNG diversification.

Domestic production.

Energy efficiency.

And long-term industrial energy policy.

Energy is not simply an environmental issue.

It is a matter of national and continental security.

Migration cannot remain a national political battlefield

The same contradiction exists with immigration.

Europe has external borders but for years struggled to create a genuinely unified migration policy.

The EU Pact on Migration and Asylum entered into application in June 2026 and represents an important step toward a common European system. (Migration and Home Affairs⁠)

But Europe needs to go further.

A continent with free movement internally cannot sustainably manage migration if responsibility for external borders remains politically fragmented.

Europe needs:

One external-border strategy.

Common asylum procedures.

Common return mechanisms.

Common agreements with countries of origin and transit.

Common legal migration channels.

A common European policy for skilled immigration.

And a fair distribution of responsibility.

Otherwise Schengen itself becomes politically vulnerable.

The European economy has another enormous problem: scale

Europe has extraordinary companies.

But it has too few companies capable of competing globally at the scale of American technology giants.

The gap is increasingly visible in artificial intelligence, digital infrastructure, venture capital and private investment.

Recent analysis cited by the Financial Times estimates that US corporate investment in equipment and facilities could rise by around 40% in real terms between 2021 and 2027, compared with only 12% in the euro area. It also notes that US technology giants are expected to invest more than $725 billion in 2026 alone. (Financial Times⁠)

This is not simply a question of regulation.

It is a question of scale, capital and risk appetite.

A European start-up should be able to become a European company without immediately having to think about 27 different national regulatory and tax environments.

A European investor should be able to deploy capital across Europe almost as easily as an American investor can deploy capital across the United States.

A European company should be able to scale across the Single Market without discovering that the Single Market is still fragmented in practice.

The EU has 450 million consumers.

The United States has a single political, fiscal, legal and capital-market framework covering a huge domestic economy.

Europe has not completed that integration.

China understood something Europe has not

China understood that scale matters.

A Chinese company has access to a huge domestic market and operates within a national strategic framework.

China has combined industrial policy, infrastructure, manufacturing, technology, finance and geopolitics.

Europe has many of the same ingredients.

But they are fragmented.

Europe has capital.

Europe has engineers.

Europe has universities.

Europe has industrial companies.

Europe has infrastructure.

Europe has a huge consumer market.

Europe has sophisticated financial institutions.

Europe has the euro.

Europe has enormous foreign-exchange reserves and savings.

Europe has a world-class standard of living.

What Europe lacks is the ability to combine these assets into one strategic machine.

Russia is the opposite lesson

Russia demonstrates the power — and the limitations — of strategic concentration.

Russia’s economy is far smaller than the combined European economy, yet Russia can mobilize military, energy, intelligence and diplomatic instruments around a centralized geopolitical strategy.

In 2025 Russia spent approximately $190 billion on its military, equivalent to around 7.5% of GDP. (SIPRI⁠)

Europe spends vastly more in aggregate.

But spending alone does not create power.

Organization creates power.

The European problem is therefore not simply that Europe spends too little.

It is that Europe does not transform its aggregate resources efficiently into geopolitical capability.

Europe does not need to become an empire

This is not a call for European militarism.

It is not a call for European nationalism.

It is not a call for confrontation with the United States.

It is not a call for confrontation with China.

It is not a call for war with Russia.

It is a call for European sovereignty.

A Europe capable of defending itself is more useful to America.

A Europe capable of competing economically is better for China-Europe relations.

A Europe capable of negotiating from strength has greater influence over Russia.

A Europe capable of controlling its borders is more stable.

A Europe capable of securing its energy supply is less vulnerable.

A Europe capable of financing its technology is more competitive.

And a Europe capable of speaking with one voice becomes a genuine global power.

The real problem with another think tank

This is why I remain skeptical about the proliferation of European think tanks and strategic initiatives.

The Rhine Group may produce excellent ideas.

But Europe does not need another document explaining that productivity matters.

It does not need another report explaining that European capital markets are fragmented.

It does not need another study explaining that American technology companies are larger.

It does not need another analysis explaining that Europe depends on NATO.

It does not need another paper explaining that China is becoming more powerful.

Europe already knows all of this.

The missing ingredient is political will.

A think tank can describe the road.

Only political leadership can take Europe down it.

What Europe should actually build

Europe should establish a much more integrated political architecture around a limited number of strategic powers.

A common foreign policy.

A common European defence policy.

A European defence industrial base.

A genuine European military capability.

A common energy strategy.

A common migration and external-border strategy.

A deeper capital markets union.

A truly integrated digital market.

A European industrial policy focused on strategic technologies.

Common infrastructure investment.

A European intelligence and cyber-security capability.

A stronger European diplomatic service with real strategic authority.

And, eventually, a political system capable of making decisions in these areas without allowing one national government to paralyze the entire continent.

This does not require eliminating national governments.

It requires deciding which powers are simply too important to remain exclusively national.

The Scandinavian question — and the Mediterranean question

Europe also needs to overcome the false choice between Northern and Southern Europe.

Northern Europe cannot permanently expect Southern Europe to accept policies designed primarily around northern fiscal priorities.

Southern Europe cannot expect Northern Europe to finance unlimited national spending.

Eastern Europe cannot expect Western Europe to ignore its security concerns.

Western Europe cannot expect Eastern Europe to accept strategic decisions made without considering the Russian threat.

The answer is not another compromise between 27 positions.

The answer is a European strategic interest that sits above them.

If Europe agrees that security is European, then defence becomes European.

If Europe agrees that energy security is European, then energy policy becomes European.

If Europe agrees that migration affects the entire continent, then borders become European.

If Europe agrees that technology determines future power, then investment and industrial policy become European.

That is the logical conclusion.

Europe is much stronger than it believes

This is perhaps the most important point.

Europe should not look at the United States, China and Russia and conclude that it is weak.

It should look at its own resources.

A €18 trillion Single Market.

450 million consumers.

21 countries using the euro.

More than 350 million people using a common currency.

World-class universities.

World-class industrial companies.

Global financial centres.

Massive household savings.

Advanced healthcare.

Advanced infrastructure.

Strong institutions.

A sophisticated legal system.

A highly educated population.

And a military expenditure of hundreds of billions of dollars.

The raw material for a global power already exists.

The political architecture to use it does not.

That is the difference.

The choice Europe cannot postpone

The world is moving into a period of strategic competition between the United States and China.

Russia has demonstrated that military power remains central to geopolitics.

Technology is becoming a strategic weapon.

Artificial intelligence is becoming an economic and military capability.

Energy is becoming a security instrument.

Supply chains are becoming geopolitical.

Capital is becoming strategic.

Demography is becoming strategic.

And the old assumption that economic interdependence alone would guarantee peace is no longer sufficient.

In this environment, Europe cannot remain halfway integrated.

A continent that has a single market but fragmented strategic power is vulnerable.

A continent that has a common currency but no common fiscal capacity of comparable scale remains constrained.

A continent that has Schengen but cannot fully control its external borders has a structural contradiction.

A continent that wants strategic autonomy but depends heavily on an external military power has an unresolved security problem.

A continent that wants to compete with China and the United States while fragmenting its own capital and technology markets is voluntarily reducing its potential.

Europe must choose to become one power

The European project was never supposed to stop with free trade.

It was never supposed to stop with Schengen.

It was never supposed to stop with the euro.

Those were extraordinary steps.

But they were steps.

The next step must be political.

Europe needs to think with one strategic mind.

It needs to negotiate with one voice.

It needs to defend itself with one strategic capability.

It needs to secure its energy through one continental strategy.

It needs to manage its external borders through one European framework.

It needs to finance innovation through one integrated capital market.

It needs to protect its strategic interests with one foreign policy.

And it needs leaders capable of explaining to Europeans that sovereignty in the 21st century does not necessarily mean more national sovereignty.

Sometimes it means pooling sovereignty to create power that no individual European country can possess alone.

That is the great European paradox.

France is too small to compete with the United States and China on its own.

Germany is too small.

Italy is too small.

Spain is too small.

The Netherlands is too small.

Sweden is too small.

Poland is too small.

Every European country is stronger together than alone.

Europe itself is the scale.

Schengen exists. The euro exists. Everything else is missing.

This is the conclusion I keep coming back to.

Europe has already demonstrated that extraordinary integration is possible.

Schengen exists.

The euro exists.

The Single Market exists.

Free movement exists.

A European Central Bank exists.

European institutions exist.

What is missing is everything required to turn those achievements into geopolitical power.

A truly common foreign policy.

A real European defence.

A European army or integrated military capability.

A common intelligence architecture.

A common energy strategy.

A common migration policy.

A genuine capital markets union.

A common industrial and technology strategy.

A unified diplomatic position.

And above all, political leadership capable of putting European interests above short-term national calculations when strategic issues are at stake.

If Europe completes what it started, the result would not be a weaker version of America.

It could become something different.

A continental power with the economic scale of a superpower, the technological capacity to compete with the United States and China, the military strength to deter Russia, and the diplomatic weight to negotiate with every major power on equal terms.

Europe already has the wealth.

It already has the people.

It already has the companies.

It already has the currency.

It already has the market.

It already has the institutions.

What it does not yet have is the political will to become one power.

And that is why another think tank is not enough.

Europe does not need another diagnosis.

Europe needs a decision.

The decision to stop thinking like 27 countries and start acting like one.

Because if Europe finally combines its economic scale, financial power, technology, defence capabilities, energy resources and diplomatic weight, the question will no longer be whether Europe can compete with the United States, China or Russia.

The question will be:

Why did Europe ever accept being weaker than its own potential?

Roberto Balbino — CEO, Fintech SCB.
Independent analyst of finance, economics, geopolitics and global markets.