The EU’s momentum and its geopolitical/economic position have been declining over the last two decades and this is evidenced by a series of developments. As an indication, its economic power, from 28.8% of world GDP in 1992, fell to 17.3% in 2024, with an even more impressive decline in cutting-edge technologies, shaping tomorrow, with its geopolitical importance to be relegated to a US follower. At the same time, democratic quality has been drastically eroded by the prevalence of oligarchic elements, while European cultural DNA is also deeply eroded by the arrogance surrounding the “superiority” of its culture. However, important values and principles linked to European history remain important, at least at a declarative level, and should not be lost. This retreat of the EU is not mainly due to the absence of worthy leaders (although this is also true) but mainly due to structural economic and geopolitical reasons, linked to the enormous concentration of economic power on the part of American multinationals in particular and the US effort to maintain its hegemony at a global level.
We live under the domination of very large capital and above all financial capital, which degrades production. An intertwined oligarchy/oligopoly of US-centered corporate giants has formed that strangles capital, technology and personal data, and threatens to dominate us in unprecedented ways: indicatively: a) multinational investment companies ( large assets), such as BlackRock, which manages funds in excess of 10 trillion. $, these funds being greater than the GDP of all countries, with the exception of the USA and China and with participation in almost all important multinationals on the planet). b) More generally, almost all industries worldwide are controlled, to a large extent, by a few large and interconnected multinational companies (Big Tech: Google, X, Apple, Microsoft). The historically unprecedented widespread prevalence of mega-corporate giants has not been accompanied by a corresponding emergence of supranational regulatory structures. Thus, gigantic financial interests determine and ultimately shape critical decisions: the permanent concentration of economic power around Wall Street and some other international financial centers, removes degrees of freedom from the EU, ties it to the chariot of the great capital, mainly financial and American Hegemony.
We are living through a prolonged period in which the USA tries to ensure the continuation of global hegemony. Following Braudel (1979), Arrighi (1994/2016) and partially Van Bavel (2016), we understand capitalist development in the light of hegemonic successions of economic/financial dominants. For 2-3 decades we have been experiencing the “paradox” of the impossibility of achieving the hegemonic transition, which historically marked a new cycle of development/hegemonic, as has happened in the last 500 years from Venice, Genoa, the Netherlands, Great Britain and 1940 in the USA. For decades, the USA managed to maintain its declining hegemony, effectively intercepting and leading to the stagnation and crisis of emerging powers (such as Japan, which in 1995 produced 17.8% of the world’s GDP, while in 2023 only 3.8% and more from the EU), while today its attempt to repeat the same pattern with China (and perhaps tomorrow with BRICS+) is in full progress.
With these two major trends/dominance of colossal multinationals and American hegemony, one can better understand:
- On the one hand, the changing characteristics of globalization: developed countries, since the 1980s, have chosen to transfer parts of labor-intensive production to low-cost countries. Thus, China became the “world factory”. The realization that this policy was leading to the degradation of US economic power and the rise of China led to the decision of the US and its allies (the EU, collectively the West) to dissociate themselves from China. Of course, alongside this, there were other contemporary factors, such as the pandemic and the war in Ukraine, global supply chains “broke” and it became clear that globalization was creating critical shortages and unwanted dependencies. As a result, it changes form, is limited (slowness, etc.) and is replaced by “friendly globalization” (friends shoring), that is, critical investments and subcontracting will be made in countries in the same geopolitical field.
- On the other hand, our societies seem “drugged”: they are sleepwalking towards a very uncertain and – most likely – extremely dangerous future, with characteristics of the dark decades of the 20th century in terms of the intensification of international rivalries. Like the EU, we are experiencing two wars in our neighborhood: in Ukraine and the massacre of Palestinians by Israel, with risks of expansion on both fronts. In Ukraine, instead of seeking to end the conflict, heal the wounds and seek cooperation for our future, the crisis is deepening, with nuclear war threatening us and military spending soaring, with the ultimate goal – through the reduction of Russian influence, the weakening of China. On the Palestinian issue, once again, instead of an immediate ceasefire and a “two-state solution”, the EU supports the Israeli government in its policy between ethnic cleansing and genocide, with the crucial role of the lobby Israeli.
What should be done
The EU. contribute with all their skills to the prevalence of peace and international cooperation. The logic of resolving disputes with weapons has already led to an arms race, with the American arms industries mainly favored. We should not be led into adventures (economic and military) following the USA to ensure the continuation of its hegemony, but rather in the perspective of a peaceful multipolar world.
The EU. it needs a new industrial policy to improve its productivity and competitiveness, especially in the advanced technology sectors. It needs a policy that supports its green industrial and technological competitiveness, while protecting European cohesion and the single market.
Dealing with competition from the US, which is attempted by relaxing state aid restrictions, favors already powerful member states (as has already happened with the European Chip Act). Germany spends 54% of all EU state aid. and France 24%, so when Intel decided to invest in Europe it chose Germany, which granted it state aid of 10 billion.
The EU cannot become more competitive/green/innovative/digital without cohesion. “Competitiveness or cohesion” is a false dilemma, neither can be achieved individually. Nor can it face international competition by exclusively choosing the “easy” solution of supporting its “champions” (countries, regions, companies). This policy intensifies inequalities between Member States and regions and thus undermines their cohesion and consequently their technological/innovative competence, since it relies almost exclusively on its developed core and ignores its periphery.
It should be possible to participate in technological advancement and its benefits not only in the northwestern technological advancement centers already in operation, but also other worthy counterparts that will be developed (e.g. in Visegrad and the Iberian Peninsula). Only in this way will there be long-term internal cohesion and, at the same time, competitiveness against mega-states (especially China and the USA). Business incentives should support value chains that include as many Member States as possible and, in return, improve environmental operating conditions and give back to society (e.g. quality jobs).
All this will not be achieved with the current dominant EU policy. Quite simply, there are no funds available for climate change, technological modernisation and community cohesion, with the huge increases planned for war material, while at the same time the EU continues to fail to effectively control and tax multinationals and financial giants, especially from the US. The continuation of the current dominant policy will lead from crisis to crisis, endangering the unifying project of the post-war years and the prosperity it created.
*Lois Lambrianidis is an economic geographer, Af. professor at the University of Macedonia, pr. Secretary General of Private Investments in Economy and Development.