Air Date: 7-22-2026

Today we look at how three things Europe thought were features turned out to be leverage that could be held against them: American military protection, Silicon Valley software, and cheap Chinese goods. From a French government office running Linux to a secret European defense coalition that bypasses Washington, Europe is quietly swapping out the old architecture rather than dismantling it, one operating system migration and one secret war game at a time.

Full Show Notes

Welcome to this episode of the award-winning Best of the Left podcast.

Today we look at how three things Europe thought were features turned out to be leverage that could be held against them. American military protection, Silicon Valley software, and cheap Chinese goods. From a French government office running Linux to a secret European defense coalition that bypasses Washington, Europe is quietly swapping out the old architecture rather than dismantling it, one operating system migration and one secret war game at a time.

For those looking for a quick overview, the sources providing our Top Takes in about 50 minutes today include

House of El

Bloomberg Television

Times Originals

Max Fisher

Evan Edinger

and Brit in Germany

Then, in the additional, Deeper Dives half of the show, there'll be more in 4 sections;

Section A, Can Europe Stand Alone

Section B, The China Factor

Section C, The Tech Sovereignty Playbook

And Section D, Building European Alternatives

And now, on to the show.

This morning, when staff at the European Parliament opened their browsers, the search engine was different. Google is no longer the default. In its place, there's Qwant, a French privacy-focused search engine that does not track users, does not collect personal data, and does not operate under American legal jurisdiction.

The change affects every computer in the parliament. That is seven hundred and twenty lawmakers and thousands of assistants and administrative staff. Officials told lawmakers in an email that the switch is being made in line with the parliament's commitment to digital sovereignty and the protection of users' personal data.

A few more days from now, on June ninth, a coalition of European technology companies will publicly release Euro Office, which is a sovereign alternative to Microsoft three sixty-five, built by Ionos, Nextcloud, Eurostack, XWiki, OpenProject, and several other European firms. It includes web editors for documents, spreadsheets, and presentations with real-time collaboration, which is a familiar interface designed to feel like Microsoft Office, and full compatibility with existing Microsoft file formats, all governed by European law and hosted on European infrastructure.

So in the space of one week, the European Parliament replaced Google, and the European technology sector is releasing a replacement for Microsoft Office. Both are happening in June twenty twenty-six, and neither is a coincidence. The pattern here is that the entire American software stack that European institutions have depended on for decades is being systematically replaced, not in a single dramatic announcement, but in a rolling sequence of decisions that are landing one after another, week after week, each one building on the last.

Start with what's happening today. This morning, June fourth, the European Parliament switched from Google to Qwant. Also today, the European Commission unveiled the Tech Sovereignty Package, the legislation that will formally restrict American cloud providers from handling sensitive European government data, require European preference procurement for digital services, and establish new rules on chips, AI, and cloud computing as part of the Commission's Buy and Use European program.

Two announcements on the same day, the Parliament replacing the search engine on the same morning the Commission publishes the legal framework that makes replacing everything else mandatory. And then on June ninth, EuroOffice launches publicly on GitHub. We have a separate long video analysis on that for the full deep dive.

IANA CEO Achim Weiss said, "With the geopolitical developments we have seen in the last year, there is a clear need for a reliable, fully Microsoft-compatible, and easy-to-use sovereign office solution in Europe." The suite is designed specifically for public authorities, education systems, and enterprises that need to move away from Microsoft 365 without losing functionality or forcing staff to learn an entirely new interface.

The first release includes documents, spreadsheets, and presentations. Collaboration features are built in from day one, and because it is open source, any European government, university, or company can deploy it on their own infrastructure without any licensing fees, without American servers, and without the Cloud Act applying to a single byte of data.

If you've been following this channel's playlist on European digital sovereignty, the next few weeks are going to be the most significant period this channel has ever covered. I have very exciting content coming up on this front, so if you're not already subscribed, now is the time. The Parliament switch to Quant is part of what the spokesperson described as a larger framework of actions aimed at reducing EP reliance on non-EU digital tools and promoting European-based privacy-focused services.

That framework is not vague. It is operational, and it is expanding. France announced in April that its entire government is migrating from Windows to Linux, a sovereign operating system switch affecting every ministry and public institution in the country. France also announced it is replacing Microsoft Teams and Zoom with Visio, which is a domestically developed video conferencing platform across all public institutions by twenty twenty-seven.

Ecosia, the German search engine with over twenty-five million monthly users, switched its AI system to a European model provider just last month, and Switzerland has already begun migrating government infrastructure away from Microsoft to domestic alternatives. If you're trying to understand how to read through institutional announcements and see the structural pattern underneath, my book, Awake: The Practice of Critical Thinking in an Age of Self-lies, is available as an e-book and audiobook.

Subscribers get ten percent off, and you can grab the first chapter for free in the description links below. The timing of all of this, however, is inseparable from what happened two weeks ago in the Netherlands. Microsoft was caught sharing the names, email addresses, and meeting minutes of Dutch civil servants with the United States House of Representatives unredacted with full identifying information because the US government considers the EU's Digital Services Act to be censorship and wanted to know who was enforcing it.

Microsoft had no legal ability to refuse the request under American law. The Cloud Act compelled compliance. The civil servants whose identities were handed over could now face travel bans or personal sanctions from Washington for just doing their jobs enforcing European law. That incident, which this channel covered the day it broke, did more to accelerate European tech sovereignty than any policy document or summit declaration could have achieved.

It proved with named individuals and named consequences that running European government operations through American software means American law applies to European officials whether Europe consents or not The replacement architecture is now being built across every layer of the software stack simultaneously.

For search, Qwant is replacing Google at the parliament. Ecosia is switching to European AI. For office productivity, we have EuroOffice launching June ninth as a sovereign Microsoft three sixty five alternative. For operating systems, we have France migrating from Windows to Linux. For video conferencing, France replacing Teams and Zooms with Visio.

For cloud, Thales wrapping Google's technology in a European legal cage around S3NS in France and a new entity in Germany. Stackit providing sovereign cloud to the Dutch government. KPN and Thales building a sovereign military cloud for the Netherlands. For AI, Mistral building hyperscale data centers on European soil financed by European banks, ASML funding it, the EU building five AI gigafactories.

Then for satellites, we have Iris² replacing Starlink dependency, the commission blocking Starlink from the two gigahertz spectrum band. Then, of course, for payments, we have Wero building a continental system that routes around Visa and Mastercard. Each of these decisions was made independently by different institutions in different countries for different immediate reasons, but they are all moving in the same direction.

They are all accelerating, and they are all landing in the same compressed window of time. It doesn't sound like coordination in the formal sense, but it is a form of convergence, the moment when dozens of separate institutions arrive at the same conclusion simultaneously because the evidence pointing towards that conclusion has just become impossible to ignore.

I think EuroOffice will likely achieve adoption across at least three EU member state government systems within eighteen months of its June ninth launch. Qwant's installation as the parliament's default search engine will probably become the template for other EU institutions. The European Council, the European Commission's internal systems, and EU agencies will follow within twelve months.

The Tech Sovereignty Package published today will likely establish the legal mandate that makes these switches not just recommended but required for sensitive government operations. And June twenty twenty-six will probably be remembered as the month the European software stack stopped being American, not because of a single dramatic, huge decision, but because every institution on the continent looked at its screen on the same morning and basically concluded, "This has to change," and then just changed it.

But the software is only sovereign if the data underneath it stays in Europe. I made a separate video on how Microsoft got caught leaking Dutch civil servants' identities to Washington and how the Netherlands had already signed the contract to move that data to European infrastructure before the leak even happened.

China shock hit parts of the US hard. Autor and his co-authors estimate that it accounted for nearly 60% of all US manufacturing job losses between 2001 and 2019.

I think that the US did two things wrong. First, we just let it rip, where there was no gradualism about it.

And with labor markets, you really don't wanna just rip the Band-Aid off because labor markets have a natural rate of adjustment of a couple percent per year, 'cause that's the rate at which people retire and new people enter. And people make those transitions by choosing new occupations at entry or retiring from old ones.

They don't generally, you don't go mid-career from being a lawyer to being a manufacturing worker or vice versa. And so you don't want things to change that fast. You can handle change, but at a gradual rate. We didn't do anything to buffer that shock. The other is we had no real social policies in place to help people, to help communities and to help people adjust.

The China shock dealt a blow to labor-intensive manufacturing like automobiles and textiles. Something similar may be playing out across Europe now as Chinese exports to Europe surge and prices of some goods collapse. French President Emmanuel Macron calls the trade imbalance, quote, "unbearable." And Ursula von der Leyen of the European Commission said that the bloc's relationship with China has reached, quote, "an inflection point."

Europe has been one of those markets, and, Chinese exports to, Europe are growing very rapidly, and they threaten to displace a lot of European manufacturing that remains, most visibly in the automotive sector and, in Germany most of all. And, this is going to, I think, have similar risks for them in terms of hollowing out sectors really rapidly.

Europe's China shock seems to have been triggered in part by US tariffs on Chinese goods, leading China to look for new markets. But as Mark Twain said, "History doesn't repeat itself, it often rhymes." And this time it may be different for Europe than it was for the US.

There was this sense of, oh, all of the exports that were going to the US, 'cause there has been a big reduction in Chinese imports coming into the US, there's a feeling that those goods are just being diverted to Europe and elsewhere.

And that, we're not quite seeing that in the numbers.

Stephanie Flanders runs economics and government for Bloomberg News and thinks the story is more complicated than China flooding Europe's markets.

We are seeing that China has successfully offset the impact of US tariffs by trading more with other countries.

But it actually, if anything, seems to be different goods, and it seems to have been done through, cutting the price of some of those different goods that they used to sell into Europe. as ever with trade numbers, it's just a bit complicated. But it is certainly true that China, on the face of it, has not been affected as much as you would have thought from the big reduction in exports going to the US.

The US trade deficit has been falling since Liberation Day, when President Trump announced sweeping tariffs on imports from many countries. But fewer Chinese exports to the US did not mean China's exports overall went down. To the contrary, it now has a $1.2 trillion trade surplus as its exports have actually increased.

So the increase has been quite widely spread, David, 'cause obviously the rest of the world as a market is bigger than the US. But the headline numbers are you've seen about a four, just over a four percentage point reduction in Chinese exports to the US. but actually overall, the exports last year increased by 3%, so they'd actually more than offset that swing in their exports to the US.

And that's been spread over, I think the place that's had the biggest increase is Africa, albeit from a small base. They've seen a lot more Chinese exports and Europe, other places have also seen more, but it's more on the order of sort of one, 1 1/2% growth.

Another difference in this China shock is the kind of goods China is exporting all over the world.

If you're mostly just importing without exporting, you're just accumulating trade deficits, that means that it's not obvious where all those people are supposed to go. There's not a new set of activities opening up, simultaneously. So I think it's quite a challenge. It was quite a challenge for the United States.

We didn't manage it particularly well. And I think it's actually in many ways more challenging now than it was 20 years ago because China has moved so far up the value chain. When the China shock hit the United States in 2000, China was not exporting automobiles, but now they're a world-class auto supplier and they're the best producer of electric vehicles in the world.

There's a huge car industry in Europe, particularly in Germany, and they feel very threatened and understandably But it will not just be in automotive, but it'll also be in heavy industry like rail cars and shipping, but also be in lots of consumer goods. And so China is a formidable competitor and not just in low value-added labor-intensive manufacturing the way it was 20 years ago, but in really all the high-tech sectors and all the consumer products that are, central to, both what, consumers, purchase, but also what a lot of, advanced economy manufacturers produce.

Martin Buch sees that happening already. To adapt, his company is turning to an area that isn't affected by China's reach and manufacturing dominance, defense.

We do round about 80% of our revenue in automotive, but our, part of our strategy is to diversify into other areas. We are already doing some, supplying to semiconductors, some to medical, to the general industry.

But we would like to do more in defense and space, actually. That's part of our roadmap, a f- 10-year roadmap, and we are already supplying to the drone industry, which has become much more important now because of the Ukraine-Russian war. And we have some more plans for '26. That's gonna be announced in the second half of this year.

We have some plans to come forward with our core competence actually, which is mechanic and mechatronic products.

Defense spending is government spending, which means it has to be paid for through taxation or borrowing. So it's not, you can't run your economy just by making defense goods for yourself.

But that will use some of European industrial capacity and perhaps give, focus to some of what they're doing and also technological advance. They also will face the same supply chain constraints the United States does. A lot of our military inputs come from China, including, for example, rare earth metals.

The German case, it has been quite dramatic in these sectors that had previously been, absolutely at the heart of Germany's kind of, self-identity as a manufacturing power, machine tools and cars. I think the only thing that's offsetting that in term- which is quite a big thing, in terms of growth overall in Germany is, of course, they're the ones who've had...

They're increasing dramatically their defense spending, and they're getting a fiscal impulse from that, which is not really, present in the same way in other countries. So the country... we are seeing a lot of structural change hitting Germany at the same time, partly a res- as a result of Donald Trump's trade policies with respect to China and other places, but also as a result of being in a more scary world.

But where China makes life harder for some European manufacturers, it is lending a helping hand to central banks.

Annoyingly for those sitting in central banks, the numbers, it's hard to tease out the data 'cause it's always tends to be a bit behind the curve. But we are seeing not so much the volume changing, the overall value of trade changing, but within that, maybe more goods at a lower price.

And actually the, the reduction in price may actually be helping to pull down inflation in some of these countries.

And does that relieve some pressure on the European Central Bank?

I think it's one of those things. We've heard some Bank of England policy makers and European Central Bank policy makers talk about it.

there obviously appeared the European Central Bank has been on hold for a long time. they've been adjusting their inflation forecast. A lot of people, including Bloomberg's economists, think that inflation's gonna undershoot the Eurozone's target, this year, and that they should potentially be looking to cut rates further.

If we are witnessing a sort of second coming for China, it's coming in some very different ways. In the products it is making and in the regions it is exporting to, with different economic effects. But as before, some particular sectors and geographic areas could be hit harder than others.

For nearly 80 years, European allies slept soundly under the protective nuclear-backed wing of the United States. America provided the muscle, the missiles, and the guarantee that an attack on one would be treated as an attack on all.

And to even hint at backup options risked alienating the White House, giving Washington an excuse to pack up its troops and signaling weakness to the Kremlin. But welcome to 2026.

Europe needs to step up and take on its responsibility.

Behind closed doors, a dramatic shift is underway. European officials are actively weighing radical proposals to defend the continent against a Russian assault on their own.

What would it take for Europe to defend itself from Russia? And how did we get to the point where Europe can no longer depend on its greatest ally? A constant during Trump's years in power has been his berating of NATO allies and constant threats of abandonment.

we've been protecting these countries for years with NATO, 'cause NATO is us.

And as it turns out, Trump has always been resentful of how much the US was contributing to the alliance versus the rest of the group.

If you look at the payments that we're making to NATO, they're totally disproportionate with everybody else's, and it's ridiculous.

In more recent times, a series of high-pressure moves from the Trump administration have tipped the scales further.

From the aggressive campaign to annex Greenland, a NATO member's territory, to coercing Europeans into a confrontation with Iran, to the sudden cancellation of long-range Tomahawk cruise missiles and the withdrawal of thousands of US troops from European soil, the message from Washington has become impossible to ignore.

Trust, once the invisible glue of the Atlantic Alliance, has quietly corroded. European electorates have noticed. A fresh poll of 12 nations reveals rock-bottom public confidence in the US as an ally. Only 35% of Britons, 27% of Germans, and a measly 22% of Swedes trust that the US would actually come to their defense if attacked.

To put that in context, more Europeans now trust their own national governments to handle a security crisis than they trust Washington. The fear is that a Russian incursion into a Baltic state, say, would be treated by Washington as a minor regional skirmish, not worth risking American lives over, and that the political fallout from such a non-response would destroy NATO and the EU as functioning institutions.

If you can't rely on the American nuclear umbrella, you build your own. Under proposals currently being discussed in security circles, a nuclear hedging coalition could form. Non-nuclear states like Germany, Poland, Sweden, and Ukraine could start sharing advanced nuclear technologies, dual-use infrastructure, and delivery systems.

The goal isn't to become nuclear powers overnight. It's to bring these countries right to the threshold, close enough that Moscow could never be certain they wouldn't cross it. A last resort plan Z warning, launch a warhead at Europe, and you'll be facing an instantly atomic continent in return. It sounds like science fiction, but public support is already surging.

65% of Poles and 56% of Swedes say they would back a national atomic arsenal. In Germany, a country that has spent 80 years deliberately avoiding any such discussion, the debate is now happening in mainstream politics. So let's get specific. Let's imagine a European NATO member has been invaded by Russia.

This triggers Article 5, the alliance's founding guarantee. An armed attack against one NATO member shall be considered an attack against all members. More importantly, it triggers an obligation for each member to come to its assistance. Article 5 has only been formally invoked once since it was drafted in 1949 after the September 11th terrorist attacks against the United States.

For it to be effective, the decision to invoke Article 5 has to be unanimous. Every member state gets a vote. So what happens if one ally, say, the United States, refuses to participate? The answer according to the proposals now being quietly circulated, you bypass the US entirely. The blueprint suggests reorganizing European defense around regional coalitions built directly on NATO's existing joint force commands.

There are two principal joint force commands in Europe, one covering the central and eastern flank, the other, the Mediterranean. Under the new proposals, they'll be given what are called pre-delegated powers. If a member state is attacked, these regional coalitions activate automatically, no waiting for a consensus in Washington.

The strategy outlines a surprisingly aggressive posture designed to deter Vladimir Putin, not just from invading, but from even contemplating it. The proposals explicitly mention seizing chunks of Russian territory, including the heavily armed semi-exclave of Kaliningrad wedged between Poland and Lithuania to use as bargaining chips.

The logic, if Russia wants to negotiate an end to the conflict, it has to come to the table knowing Europe holds something it wants back. This regional strategy is backed by a major independent study overseen by former Finnish president Sauli Niinistö, a figure with serious credibility given that Finland only joined NATO in 2023 after decades of careful neutrality driven by exactly the threat Russia now poses.

The study outlines wiring together a powerful sub-NATO alliance of Europe's strongest military players, France, Germany, Poland, the Nordic States, and the UK, a coalition capable of generating real military mass without waiting for American permission. Defense analysts are increasingly confident that this core coalition could realistically defeat a Russian incursion with only minimal US assistance.

Basic intelligence feeds, satellite targeting data, logistical support, not boots on the ground, not aircraft carriers, just the tools that keep the machine running. Think of it as a pragmatic de facto division of labor. No grand treaty, no signing ceremonies in Brussels. The British focus on the North Sea and the high north.

The Poles and Germans anchor the eastern flank. The French provide the nuclear backstop and the expeditionary capacity. It sounds seamless, except for one glaring problem, Great Britain While the continent scrambles to prepare, Britain is being widely criticized as a complacent outlier, a country that talks the language of global leadership while quietly hoping someone else does the heavy lifting.

Allied diplomats are reportedly exasperated by London's refusal to engage seriously with these backup plans. For decades, every single UK strategic defense review has started with a whiteboard that says US primacy first and NATO second. The assumption that Washington will always be there has become so deeply embedded in British strategic culture that challenging it almost feels disloyal.

Senior defense experts now warn that Britain has essentially outsourced its strategic thinking to the Americans and is entirely unequipped for a world where that outsourcing is no longer an option. Unsurprisingly, you won't find NATO ambassadors openly debating these radical options during formal sessions.

No one wants to officially reform the alliance's institutions just yet. Doing so would risk sending exactly the signal Washington wants, that Europe has given up on American involvement. And so the dance continues, publicly committed to the old architecture, privately building the new one. Some former senior officials argue that improvising a European response in a crisis might be better than building a rigid, elaborate architecture beforehand, noting that NATO has a history of landing on its feet like a cat.

The alliance has surprised skeptics before, but relying on luck is no longer a strategy. As European policymakers point out with increasing urgency, they no longer have the luxury of sitting around and hoping for the best. Russia has fought a land war in Europe for four years. The United States has made clear, repeatedly unmistakably, that its commitments are conditional, and China is watching everything.

Whether Europe builds a nuclear hedging coalition, activates pre-delegated joint force commands, or quietly wises together a sub-NATO alliance of the willing, one thing is becoming undeniable. The era of unconditional reliance on Washington is over.

to understand what China did, we're gonna use the board to map out the global oil economy, what happened to it from the Iran war, and then what China did to save it from completely imploding. Good? So the main thing about oil is it's traded in one unified global market. That means all the world's producers sell into the same big supply of oil, which the world's consumers all buy from.

And this is why when something happens in any part of the oil world, like, say, a war in the Middle East, it affects everyone. And on any given day, there are about 100 million barrels moving through this system, 100 million barrels produced every day, and that is also 100 million barrels that gets consumed every day And it's really important that these two numbers are the same.

Every drop of oil that gets produced every day gets sold and consumed every day. There is zero slack in the system, and that is why it is such a big deal when the Iran war starts and Iran shuts down the Strait of Hormuz Doing this, shutting down the Strait of Hormuz, blocks 20 million barrels of oil per day from reaching the world

So now we've only got 80 million barrels a day in output to meet 100 million barrels a day in demand, right? This equation no longer balances. We now have a 20 million barrel a day deficit And this, this deficit means that pretty soon, 20% of the oil-consuming world was gonna power down. That's one in five flights, one in five factories, power plants.

It's a global calamity. Still, the world is ready with a couple of defenses, including this: oil pipelines that go around Hormuz.

This is the east-west pipeline, known as Petroline.

That big one is controlled by Saudi Arabia, and then the United Arab Emirates controls the other main one.

This is the Abu Dhabi crude oil pipeline.

And these pipelines add about 7 million barrels of oil back into the system. It's a lot. Okay, so now just to make sure we're keeping score, we're at a negative 13 million barrel a day deficit, right? We removed 20 million barrels from the system, we added 7 million back in, 13 million deficit. It's better, but it's still really bad.

Okay, so you guys are still with me? The other big defense that the world has is strategic petroleum reserves, emergency stockpiles of oil. These tanks are all full of oil. America and other countries keep huge stockpiles like this for emergencies, and there are even bigger US stocks I can't show you because they're kept in huge salt caves thousands of feet underground.

Tons of countries have these reserves. Here's Japan's, one of the world's largest. A week into the war, 32 of these countries got together and all opened up their reserves to the world. This was the largest release of reserve oil in history. Hundreds of millions of barrels from dozens of countries. It was a huge deal.

But the war dragged on and on, and it was stretching out these releases, so in the end, they added up to an average two and a half million barrels per day. So these were the world's big defenses for a mass oil shock, like what happened in the Iran war. And together, these bring our deficit down to 10 and a half million barrels a day.

This is still a calamity, more than a 10th of global energy usage, and it gets worse. Those 32 emergency stockpiles from all over the world, they are running out. Here's America's reserve. It's dropping hard and fast towards zero. But here's Japan. It's same thing, absolutely plunging. So not only are these reserves tiny relative to the hole they have to fill, but they're only good for a few months, and then they are gone, man, which is exactly why everyone looked at all this and said, "Yeah, the world is ending."

Until a few weeks in, people started to notice something weird happening.

This is from a conference call a business intelligence firm called Kepler held back in April, walking its clients through what was going on in the oil market, and they focused on one thing in particular.

What's happening with China, right? So I just wanna look at China monthly imports, right now.

China's oil imports, that's those bars in the chart, had suddenly dropped to half. Half.

See, and how much long, how long could that carry on?

I know those guys did not seem super emotive about this. I, market analysts, but trust me when I say this discovery made people lose their minds, and let me give you some context for why.

This shows China's oil imports since 1980, and that rise is one of the biggest stories in the history of oil. This is where China surpassed the US as the world's biggest oil importer and just kept going. Oil has powered China's rise from the start. It fuels their factories, lights their cities. It's the engine of their economy.

Yes, China has been building lots of solar and wind, but renewables like that still produce just a fraction of the power that they get from coal, gas, and especially oil, which is why it seemed impossible that right after the Iran war started, China's imports that had been rising for decades dropped overnight by half.

This decline here, five-and-a-half million barrels a day, is equivalent to more than all of India's oil imports, more than Europe's five biggest economies combined. This was the thing that saved the world, China. China took its imports and magically cut it by five and a half million barrels a day. Which means that what started as a 20 million barrel a day deficit from Hormuz closing is now after all those alternate pipelines, plus emergency stockpiles, plus China doing whatever it's doing, means that deficit is now down to just five million barrels a day.

And look, that's not great, that's still pretty serious, but everybody shaving 5% off of their oil usage instead of 20% is the difference between mass blackouts and economic collapse, which is what we thought we'd get, and a few months of higher gas prices, localized flight cancellations, and some gas lines in Southeast Asia, which is what we got instead.

So yeah, I would call that basically saving the world, really thanks to this guy. But China has not said a thing, hasn't acknowledged they're doing this, hasn't said how or why, just stopped importing oil by the largest amount any country has ever stopped importing oil. Poof, overnight, cold turkeyed this substance that the entire industrialized world, and China especially, have made essential to their daily functioning for 100 years.

And since China won't tell us how they did this, we are just gonna have to piece it together ourselves, starting with a quiet change China made right at the start of the war This article from two weeks into the war revealed that China had ordered a total ban on fuel exports. The context here is China has a huge refinery industry, and what it does is it turns raw crude oil into stuff like jet fuel and gasoline.

And most of those fuels stay within China, but because they're good at it, they export a bunch of it to all over Asia. Until March, when China banned those refiners from exporting a drop of fuel. And at the time, everyone assumed this was to preempt a potential fuel shortage within China by building up stockpiles.

And one reason I say assume is that this ban was imposed, that's right, in secret. That's why this story is credited to four sources with knowledge of the matter. That means off the record. But that assumption about why China was doing this was wrong. Turns out it wasn't to stockpile jet fuel or gasoline.

It was because China was about to stop importing half of its oil, so those refineries were about to do a lot less refining

So rough math, I'm gonna say that accounts for cutting about half a million barrels in daily demand out of the five and a half million that China cut overall Okay, next big move, and if you care about climate change or air quality, you're gonna wanna cover your ears here. Coal.

This is from a few weeks before the war, why China is building so many coal plants, and it found that China commissioned more than 50 large-scale plants last year alone. So once the war started, China spun a bunch of those plants online or pushed its existing plants into overdrive, or probably both. But by April, it was burning a record amount of coal.

China also figured out a way to use coal instead of oil to make plastics, which usually is a petroleum product. They also found a way to use coal to make fertilizer, which usually also is an oil byproduct. All of which allowed them to, say it with me, import less oil.

If you buy a tech product in Europe, you have a reasonable expectation that it should last you at least two years free of defects. And if it's not up to your expectations or breaks down before then, you can demand a return or a replacement. This law protects consumers from shady business practices.

My 2019 Intel MacBook Pro was awful. It was constantly having issues, kernel panics, overheating, forced restarts. It was an awful device. And I didn't pay for AppleCare because I knew I didn't need to. I even made a whole vlog on the day I was returning it because I was so surprised that this consumer rights law would literally get me back the 4,000 pounds I had spent on it.

To date, that is still the only time I've ever needed to enact that right. Companies that sell products over here have to have higher quality control, or they risk losing a lot of money on returns to people like me that understand that law is there to protect us. But it's laws like this where you really begin to notice a pattern that life in Europe is one that gives more rights to the everyday person over giant corporations, and shared benefit over private.

Everyone can enjoy public transit. Everyone can benefit from free healthcare and safer food. And the biggest one of all is workers' rights. I've already made an entire video breaking down the workers' rights I gained moving from the US to the UK, but a quick summary would be 28 days minimum paid holiday, one year paid maternity leave, two weeks paid paternity leave, sick leave, even the right against unlawful termination.

When working part-time at Urban Outfitters in London, even though I worked less than 20 hours a week, I still got two days paid holiday per month. That's insane, right? No, that's just life over here. Meanwhile, I worked five years at a Pizza Hut in New Jersey for over 30 hours per week. Never got a single day of paid vacation in my life.

That, and they only paid me $2.13 an hour, which was insane at the time, is insane now 'cause they still haven't increased it, and it hasn't been increased since the '70s, because saves the corporations more money. Yet again, corporations versus the people. If one day I got a new boss in America, and even though I'd been working at the same company for four years, he didn't like me, he could fire me on the spot, and I'd be out of a job and in an awful situation.

In the UK, it's so much harder for an employer to fire you because the law requires dismissals to be fair in both reason and in procedure. In practice, that usually means your employer has to give you warnings and a chance to improve before they can even think about letting you go, unless it's something super serious, like gross misconduct or something.

Everything in Europe gives you, the individual, more rights over those with more money and power. Growing up, this is how I was taught the US was. I was taught the US is for the individual, is for the individual's freedoms. But in practice, that is really just not the case. And once I experienced just a year abroad, it was very apparent all of that was just propaganda.

Or maybe it's the way it was supposed to be, and things just went a bit wrong. And finally, the conversation around money. The US has a much higher cost of living regardless of your state. There are cheaper states, there are more expensive states, but the basics are still so expensive. Groceries are more expensive.

Data plans, so much more expensive. Cable, healthcare, the costs associated with driving, all of these things add up. But hey, it's also true, salaries for most office jobs are significantly higher in the US than what you can find in most countries in Europe. So if you earn a lot of money and money is your sole defining metric of success, then you can feel a lot more successful in the US.

But because the culture in Europe is work to live and not live to work, you might find that the stress and cost trade-offs and quality of life erode the value of that higher salary quite quickly. I don't care about GDP. I couldn't give two shits about companies. What I care about is quality of my life, the things that make me happy.

I, I don't really care about this whole "Oh, our country has a big GDP and my state has the GDP of Norway." Who cares? is that... That isn't affecting you in the slightest. What is affecting you is not having free healthcare, not being able to get around without forcing yourself to have to use a car, being able to have your kids go to school without getting shot.

I don't know. I just find that is such a bizarre sort of stance to have is "My quality of life is dictated by the money that the richest in the society make." It's I think the main thing though, out of everything, that I miss about the US that I can't really get here is not rights, not freedoms, not anything that's big on quality of life improvements.

It's just Mexican food and good ice cream. But the quality of Indian food in London more than makes up for both of those, for me at least. So now I'd like to ask a question I've seen quite a bit online recently. Do Americans romanticize life in Europe too much? This might make sense. You see a lot of influencers online sharing things about Europe, and you see these posts of Americans going to Europe and being like, "Oh my God, it's so pretty."

And then they come back and they're like, "Oh, I miss my iced coffee," or something like that. But I just wanna pause for a moment here, because something I find really interesting about this whole conversation is just how much the shoe is on the other foot from where it was 20 years ago. Based on what they'd seen from Hollywood films and TV shows, Europeans used to ask the same thing about America.

They were wondering if they were romanticizing life in America too much. That was, of course, when their main source of information about America was idealized interpretations in the cinema. Whereas now with the proliferation of YouTube and people sharing both sides of every situation, it seems like the pendulum has swung in the complete opposite direction.

Tell me if I'm wrong, but I'd say Americans don't romanticize life in Europe at all, but rather they long for America to have some of the basic freedoms experienced by Europeans. They wish they had the option to experience some of the freedoms that Europeans have, but within the US. Every country has its problems.

Every country likes to think their country has a uniquely bad government and inefficient bureaucracy, but that is one thing that's pretty consistent no matter where you move to. A common gotcha when having this conversation online is, "Countries in Europe have racism," or, "Countries in Europe also have a homeless problem," or housing crisis, or cost of living, so on and so forth.

That's not really something I don't think anyone's really debating. No American is looking to life in Europe as if it has no problems at all, and that the existence of these similar problems makes moving there pointless. I think most Americans who are eyeing up Europe are doing so because of the things that America is lacking.

Nearly two in three Americans want universal healthcare. America doesn't offer that. Again, two in three Americans want European-style vacation policies. America doesn't offer that. And 53% of Americans would prefer to live in a walkable neighborhood, but sorry, America doesn't offer that. The list goes on.

If America were an actual democracy, I don't think many of these people would be having romanticized views of Europe at all because they wouldn't need to. They could have everything they wanted in the country they were born and raised. And judging from the results of a recent survey showing that 52% of Americans feel that they could have a higher quality of life abroad and that 43% of Americans think they would be happier if they moved abroad, I'd say these things are very much linked.

I think this majority of Americans have seen how the US government actually operates counter to the will of the majority of the American people and have mentally given up the idea of the US ever improving in these areas that matter a lot to them. And after being continuously exposed through social media as opposed to Hollywood about how life in Europe actually is and these basic freedoms that are enjoyed over here, I think many Americans are happy enough to ignore the perceived downsides of moving abroad.

They don't really want to move abroad. They probably don't even wanna learn a foreign language. But at the end of the day, they'd probably rather do that and all the other hurdles they have to go through rather than have their family go bankrupt if they get sick or get hit by a car or get shot. Moving to a country in Europe or really anywhere at all won't solve all your problems, but it very well may solve one or two of the big ones that you actually care the most about

Even if a European government hosts its data in a European data center, even if the servers are physically located in Frankfurt or Paris, if the service provider is legally domiciled in the United States, then US law can still reach into the system.

So quite frankly, from a sovereignty perspective, this is an existential question. And up until recently, the US seemed to be a friendly and supportive ally, so Europe wasn't really thinking much about it. It basically means that European public administrations, hospitals, tax authorities, and ministries could theoretically find themselves operating on infrastructure that sits inside another country's legal perimeter, which is just wild.

it really throws the whole idea of nation-states, of borders, and democracy into question, or am I missing something here? This tension has been discussed repeatedly by European data protection authorities, national courts, and the European Data Protection Board, particularly after the collapse of the EU-US Privacy Shield framework following the Schrems ruling by the European Court of Justice in twenty twenty.

So that ruling effectively stated that US surveillance law does not provide protections equivalent to EU fundamental rights, making routine transfers of personal data to the U- United States legally precarious. So what this means is that US cloud services are widely used, they are dominant, but their legal status is really not particularly clear.

Even large public sector cloud contracts, they now exist inside a zone of latent legal conflict, and this legal layer intersects directly with the second, more recent shock of artificial intelligence, because advanced AI systems are not just software They are built on extreme concentrations of compute, specialized chips, and energy-intensive data centers, and the overwhelming majority of advanced AI training today relies on hardware designed by NVIDIA, manufactured primarily in Taiwan, although ASML in the Netherlands does play a key role as well.

But they are integrated systems largely controlled by US companies. At the same time, the US has imposed sweeping export controls on advanced semiconductors and AI-related technologies using, access to chips as a geopolitical instrument. So from Europe's perspective, this sends a very clear signal that the future productivity gains of AI and future gains, economic growth in general will depend on access to infrastructure that sits inside a supply chain ultimately governed by US strategic priorities.

So it means that Europe's next wave of automation and industrial optimization or digital public services, that can be throttled by decisions taken in Washington, not in Brussels or Berlin. So while a lot of people are arguing about the EU, not many people have stopped to think about the stranglehold that US big tech has on Europe.

Even if relations do remain friendly, even if no one intends any harm, dependence of this magnitude, it just changes how power works. And to be honest, I'm just hoping that someone in the comments will correct me and tell me that I'm over-exaggerating the situation or that I've missed something Because US, through US big tech, basically, they have access to all of European data, and I'm not talking about social media.

We're talking about health records, about company secrets, innovation, data protection, tax data. Essentially anything that is stored on a US cloud service provider, it really introduces a massive asymmetry. And thank God, it does look like, the EU has realized this. if you look at European documents, increasingly they use language of strategic autonomy or de-risking and things like technological sovereignty, rather than decoupling or confrontation.

So this is not about a confrontation in a kind of emotional sense. It's really just about, sovereignty and de-risking as they keep talking about. So the goal is really not to replace US technology across the board because that's obviously very unrealistic. most European officials, they admit that this is just not possible, but the goal is really to ensure that the most sensitive layers of European society, like government data, identity systems, health records, defense infrastructure, those kind of things, that at least they are somehow shielded from US big tech.

So if this reality is as severe as it appears, then the European reaction looks more like a slow-motion recognition of a structural mistake. wasn't this obvious ten years ago? surely you could have seen this coming. Did we really have to wait for Donald Trump to wake up to this structural reality?

Like there have been several documentaries made about how social media run by American big tech companies have influenced or changed election outcomes. So it seems to me that this is really very long overdue, and this really does matter a lot because the platforms that Europe has relied on are-- they're not just tools, they actually form the channels through which society operates on.

And I think we tend to forget that. Like cloud infrastructure decides where data lives and whose courts can reach it. The operating systems and app stores, they mediate access to work and services and communication, and social media platforms shape the emotional climate of politics long before parliaments even begin to discuss an issue.

And they also change how society functions and how people relate to each other. In essence, they are changing the social fabric of society globally, not just in the US. Modern Europe built a large portion of its post-war identity around constraint, procedure, and legal architecture because the continent learned painfully and repeatedly that the state moving quickly and with ideological clarity can become extremely dangerous.

Now that lesson is embedded in institutional courts, data protection regimes, and the slow friction of due process. These are often experienced as frustrations, especially when the world moves faster and other powers appear less encumbered, but they are also a form of collective self-control and a deliberate attempt to ensure that power remains accountable, contestable, and domesticated by law.

The problem is that platform power grew in a way that bypassed many of these mechanisms. It expanded transnationally, consolidated into a few companies, and became embedded in everyday functioning of institutions before politics had found a language to describe what was happening. This is why the sense of unease now feels deeper than the usual argument about regulation.

So what Europe is increasingly confronting is something much more fundamental. the possibility that the core channels of modern life, in essence, the digital nervous system of society, that may now sit permanently outside European accountability structures while still shaping European society from the inside, and that is not a good place to be.

that is essentially how you abdicate your sovereignty without going to war So underneath the policy language of sovereignty sits a psychological fact that is very easy to miss if you treat this as a standard transatlantic spat. So trust is what makes dependency feel like a partnership. When trust weakens like it has now under this US president, that dependency starts to feel very much like a liability, even when nothing has maybe gone wrong yet in an obvious sense.

Europe can argue about immigration or fiscal rules and identity in national politics all day long, and yet still find that many of the most consequential levers of modern life are being set by entities whose incentives and accountability structures do not map neatly into European democratic expectations.

And so for a long time, Europe behaved as if history had ended, as if the basic architecture of the world was settled, and that all that remained was to manage it more efficiently. Security would be outsourced, technology leadership would be imported, growth would come from elsewhere, and Europe would specialize in rules and standards and social programs.

But what we are now seeing is the first serious sign that Europe no longer believes that arrangement is stable enough to build a future on. And so it's begun to accept that a civilization cannot permanently outsource the foundations of its own functioning and still expect to remain a meaningful political entity.

So I don't see this as Europe turning against, the US. I see this as Europe turning back towards itself, towards the idea that infrastructure is power, that sovereignty in the modern world does not begin with flags or speeches, but with who owns, governs, and controls the systems that organize everyday life.

Europe may still fail to build ecosystems with the scale and dynamism that United States has done. it may be too slow, there may be too much compromise, but the direction itself does matter because for the first time in a long time, Europe is behaving less like a museum of past greatness and more like a political entity that understands it has a future to defend.

And so in the kind of world we are drifting into, that may be the most European form of self-assertion possible.

We've just heard clips starting with

House of El tracing how the European Parliament dropped Google for French search engine Qwant, part of a rolling replacement of the American software stack across European institutions.

Bloomberg Television examined how a "second China shock" is now hitting Europe, threatening to hollow out German auto and heavy industry.

Times Originals detailed how European officials are secretly building defense plans to repel a Russian attack without the US, from nuclear hedging coalitions to automatic regional force commands.

Max Fisher broke down the 20 million barrel daily deficit from the Iran war, and how China quietly slashing its imports prevented mass blackouts and economic collapse.

Evan Edinger compared his Pizza Hut job in New Jersey with the UK's 28 days paid holiday, arguing America prioritizes the welfare of corporations over its own people.

And Brit in Germany warned that Europe abdicated its sovereignty by letting US big tech control the cloud, operating systems, and platforms that organize everyday life.

And those were just the top takes, there's lots more in the deeper dives sections,

But first, as you may have heard by now, the show is going through some financial troubles. We've taken a big hit on ad dollars drying up since the beginning of the year and I'm still working to turning things around. Our members supporting the show are the main thing getting us through right now but it's really been the people signing up more recently who have been helping to fill the gap that opened up.

So, if you haven't signed up yet but are thinking about it, just know that the emergency hasn't passed and we could still really use your help because our balance sheet can only bleed red for so long. Don't worry if you can only afford a few bucks a month, it's the collective contributions of people stepping up that has always gotten us through tough times like this.

So, if you get value out of the show and want to get it delivered ad-free to the new, members-only podcast feed that you'll receive, sign up to support the show at bestoftheleft.com/support - there's a link in the show notes - through our Patreon page, or from right inside the Apple Podcasts app.

We're also working on reincorporating audience feedback into the show. If you want to encourage others to leave messages, start by becoming the change you want to see in the world.

To spark ideas, here's today's question.

Just like the EU switching platforms away from US companies, individuals like you and me thinking of breaking away from the easier-but-worse option always costs something. More money, the mental energy of deciding to switch, the learning curve of the new thing, etc. This is a big part of the business model that runs most of the internet. The things that are free and set as default end up being used by billions of people because of the costs of switching. If you're one of the people who decided that trade was worth it and picked the harder, more independent path with any software or services you use, tell us what made you want to switch and share any advice you have for others thinking of doing something similar or for those who've never even considered it.

If you'd like your comments included in the show you can record a voice message - re-recording until you're happy with it - by tapping the link in the show notes,

As for today's topic,

Slowly but surely, people are catching on to the idea that when you buy a digital item like a book or movie, the reality is closer to renting, because a change in the platform you're using could mean that your purchase may suddenly disappear. Producer Deon, who worked on today's curation, caught on to this trend early and is a bit of a doomsday prepper, except instead of shelf-stable food and toilet paper, he collects hard copies of all of the movies and video games he'll want to have on hand to ride out the apocalypse.

This is a problem that no one in all of human history had to worry about before the last 20 years, but it's now hitting everyone all at once. Each person is individually being made to reorient their understanding of personal ownership and control over what we think we own, the same thing is happening at the level of national governments. In a lot of ways, when a European nation decides to cut ties with an American mass surveillance company in favor of using one based in their own country, that's not much different than Deon making sure he has a Blu-ray collection of all his favorite Nicolas Cage movies. They're both defenses against having access cut off by a higher, unpredictable power.

"Unpredictable" is the operative word. If you rented from Blockbuster, you knew it's going back in a few days. If you buy from a record store, you know you own it for life. But when you find yourself in the murky, digital middle ground, the relationship changes and can quickly turn into a power struggle with the seller exerting leverage over the buyer.

When France purchases computing services from Microsoft, it can be a mutually beneficial relationship as long as it stays neutral, but now a very unpredictable Trump administration has inserted itself into that relationship. Which is how Microsoft's own lawyer ended up under oath in front of the French Senate, being asked whether he could promise that French government data would never end up in the hands of the American government. His answer was, "No, I cannot guarantee it."

For many, just that uncertainty is enough to make them rethink international business relations. But the U.S. also proved it's willing to follow through on using its leverage when it ordered Anthropic to cut off access to its best AI models from all foreign users. That was very likely the last straw that pushed France to announce it was dropping its US intelligence software.

When I zoom out from these stories a bit, the picture that becomes clearer is that this is all part of the fallout of the slow-moving train wreck that is the end of neoliberalism. Neoliberal orthodoxy says that markets are to be considered the supreme source of truth and efficiency, which leads to the conclusion that governments should do everything in their power to get out of the way rather than intervene. Margaret Thatcher famously argued that "there is no alternative," but in the wake of the 2008 crash, it was George W. Bush who proved that was wrong. While explaining his government's emergency response to the crash, he said, "I've abandoned free market principles to save the free market system."

In the big picture, that was one of the first dominoes to fall, which pushed the entire world back into the understanding that activist governments are sometimes needed because market orthodoxy couldn't be trusted to deliver for people. That cracked the door, and people have been pushing on it ever since. Occupy Wall Street, Bernie's presidential runs, the democratic socialists, Biden's industrial policy, and the populist right at the same time.

Trump didn't invent the idea of using emergencies to claim extensive powers. Bush did it with wars and the economy. Trump just dialed it up to include everything he could think of and all the things Project 2025 thought up for him.

He has clearly ushered the activist state back into existence, and that is forcing others to do the same in response. Free market be finally and truly damned... which puts the left in an interesting position.

We rightly abhor Trump's use of state power because he uses it for self-enrichment and evil ends, or sometimes just to be a dick. But we shouldn't lose sight of the fact that it's the left that has been calling for a more activist government for decades. We want an activist government to rein in Wall Street and Silicon Valley, tax the wealthy, provide universal health care, regulate food and drug safety using science as its guide, and so on down the list.

The fight during the neoliberal era was about whether it was legitimate to use government power at all. Now the ground has shifted and the only debate that matters is over what should be done with government power, because the use of power is no longer in question.

Trump is giving everyone a view of what the ethnonationalist right wants to do with an activist government. Their idea of sovereignty is fortifying borders and keeping "the other" out. Other nations are beginning to see value in digital sovereignty for the sake of not being beholden to a foreign power. The difference between those two visions of sovereignty is nuanced but real.

Like Deon and his film collection, he's exercising a version of digital sovereignty, but it's not to hoard or to exclude, only to protect. In fact, I'm positive he'll be inviting his neighbors over for movie nights to keep people's spirits up after society has collapsed.

Sovereignty and power are neutral terms until you decide what to do with them. Being dependent on others need not be weaponized against you, just as independence need not be used to exclude others. The far right sells the myth that both happen automatically, which is why you should be afraid of everyone all the time.

The left has been calling for an activist government to reemerge from its neoliberal coma to use its power for the benefit of people while international relationships should be built on the reality of interdependence and the same basic tenets that define good neighbors.

For all that Trump has done wrong, and that's been just about everything, he also made activist government okay again. Thatcher's "there is no alternative" is dead and buried. The state can build and spend and refuse the invisible hand of the market at will, and now everyone knows it.

This is vindication. The left has spent forty years making the same demand, that government actually use its power to work for people. We're right to grieve the damage Trump has done and will keep doing, and we should work to repair every bit of it. But the worst mistake we could make would be to focus on the breaking of norms, because that implies that going back to the old status quo is the answer. Repair the damage, but don't let go of the idea that government can do big things if we want it to.

Trump used the emergency powers he claimed for himself to inflict cruelty on others and enrich himself. It's time the left stop being allergic to power so that we can point it where it needs to go. Healthcare, housing, affordability. It's time to abandon free-market principles to save the people from the free market.

And now, we'll continue to dive deeper on 4 topics today. First up;

Section A, Can Europe Stand Alone

Followed by Section B, The China Factor

Section C, The Tech Sovereignty Playbook

And Section D, Building European Alternatives

let's start with the basics. Most people hear the war game, the word war game, and they think prediction, but what can and what can't a war game actually deliver?

It cannot predict, ironically. So I said this countless times, I think, in the podcast. We're not predicting the future here. We're exploring a potential, a possible future.

So a war game, I like to describe it like a thought experiment. So you want to understand the thinking of your enemy, your own thinking, gaps in your thinking, and your own weaknesses. So you take a scenario, so in our case we said, Russia was conducting a military exercise on the Belarusian-Lithuanian border, and they did not withdraw their troops after that.

That was a fictional scenario, right? And then-

But it's something that actually did happen very similarly, w- in the situation, with Ukraine, right?

Exactly, yeah, and that's why we- '

Cause they do conduct- Yeah ... these military exercises- Exactly ... every year.

We felt that might be something that Russia was actually prepared to do at some point in the future potentially.

and of course I had a lot of background talks with experts on that from, Russia, like Ukraine, Lithuania, Europe, so we had a lot of input. And then we took this scenario, and we had experts and former political decision-makers, take decisions on the basis of the scenario. So we presented them with a scenario.

We said, "Look, there's a crisis. You are now the German government, and you are now the Russian government. Play." And what it does is people take decisions, and then the simulation develops. And as it develops, you can really find out patterns that I'm sure we'll talk about in this podcast as well.

Yeah, what I thought was fascinating was that you got some really high-ranking people to play roles that are not too far away from what they actually do in real life, right? you get people, like f- for example, NATO's former spokesperson to play NATO's Secretary General. So this is not your random Joe Miller.

Sorry if there are any Joe Millers out there, but, not them taking on, the roles of chancellors.

Yeah. exactly. And we took former political decision-makers or people who were in rooms where actual stuff was decided, like Oana Lungescu, who played our NA- NATO Secretary General. She was there all the way during the Russian invasion of Ukraine, right?

She was, like, always in the room when decisions were taken or, communicating those to the public, so she really knows what she's talking about. And we had, for example, Eberhard Zorn, who was the, former general inspector of the Bundeswehr, which is basically the army chief, right? We just use a different- Chief of

Defense,

yeah, chief of defense. We just use a different word for it in German, due to our history. and those people are, they were socialized in our political system, and they knew stuff, right? And this is why we chose them, because we wanted the results that we got to be, true to what the German political thinking looks like, right?

and of course, we also wanted people who know what they're talking about.

And it did produce quite some headlines when it first came out in German earlier this year, because this is something that you conducted at the end of last year, and th- the results were then published, and it got picked up by lots of international media, including NATO's real secretary general, who said, "Okay, this exercise has actually produced some, some concerning results."

Yeah, and we were... honestly, we were a bit surprised by the, the media coverage, but also Mark Rutte commenting on that. we did not expect that really because I found that internationally it got picked up a lot more than in Germany, and that, I think, also speaks to our strategic culture, right? but I think that especially media outlets in the UK, in the US were quite concerned about our results because, in the war game, Russia, and I don't wanna spoil the podcast for anyone here, but yeah, I gotta say it, right?

Russia achieved its strategic objectives. So there was a limited, in the war game, there was a limited military incursion into Lithuania, and the German government was not in a position to take on a leadership role, which would've been needed, to prevent this situation or react adequately. So people were quite alarmed, I would say, throughout Europe.

Yeah, because it's not a really far-fetched scenario, and it was one of the reasons, why you decided to publish the podcast in English. The last episode comes out next week, everybody who's listening can tune in real time, basically, and follow your podcast. I want to throw to Roman the question, a scenario where Russia doesn't withdraw troops after a military exercise.

This is a really good starting point, for a war game. But why specifically? Can you tell us about that Suwałki Gap? That is something that has become somewhat of a, a, a term that security circles really love speculating about, that narrow gap.

Can

I- Why is it so crucial? Why is that such an Achilles heel?

it's, it has to do with geography and, with the Russian, Kaliningrad exclave, and the w- and the road there, which is about 60 kilometers long, I think. So it's not difficult, from military, military point of view to try to cut it off and, actually cut off the Baltic republics, from the rest of NATO And that is why it is considered to be a weakness, in NATO eastern flank.

But on the other hand, I think because it is well known, I think, the probability that Russia will attack there, is relatively low, because NATO is expecting something to happen there, has been preparing for such a scenario. I think if Russia would try to do something like that, I think they would choose a different, a different, place where maybe...

so it's also, I don't believe it's Narva, for example, which is a small border town, in Estonia.

Estonia.

And, there are a lot of scenarios, books written about it, how Russians would try to, get hold of Narva and then, humiliate NATO. So a limited military operation. So the experts I've been talking to are expecting something, at a different place and, w- what's interesting about, this, this war game that, that you, you did, you did a great job, I think, and you're the pioneer in Germany because we had similar, similar war games, uh, in other countries. I remember, I was very impressed by the BBC, production, Inside the War Room, where they took- ... the British government and, tried to, look how the politicians in Great Britain would react.

Sky News, the war game also.

Yes. Exactly. What you did, you did it on a brighter scale, so you also involved other countries, NATO, so not just one government.

But for me, the most important thing was to, to show how weak Germany could be, because Germany is known to be weak because of its past, because of its difficult political situation, the German population, how Germany is trying to lead in NATO, especially with the new government under the Chancellor Friedrich Merz saying, "We are building the strongest conventional army in Europe."

But on the other hand, the German army, the Bundeswehr, is still weak. It is still trying to catch up, and, it takes time, and this is exactly the point where Russia might be tempted to do something.

But, Roman, if you're sitting in Moscow, what, m- is the strategy when it comes to the Baltics?

How do you look at that region? Just, let's just put ourselves in the Kremlin's shoes. How do they look at that region? They are, those three countries, they are members of the European Union. They, have, NATO troops stationed there. So just to an international audience, perhaps not everybody's even familiar with these three countries that together, I looked that up, they have barely the population size of Ireland.

the Baltic states were former Soviet republics, and of course, there are still, grievances in Russia about that. and the historic past, plays a major role here. So for, for the Russian president, for parts of the Russian public, it is a target. and there is Russian-speaking population there, especially in Latvia and, that is why they might see that as a leverage to do something on the board.

And this is also part of such war games where, for example, the BBC series, I've mentioned, Inside the War Room, World War III. So where they are trying to, send soldiers with no signs like they did in Crimea in twenty fourteen. And

so green men.

Exactly. The green men, the green men, trying to, remain under the radar, that plausible deniability.

how worried should we be about the answer to the question, rough patch or something fundamental changing?

let me first note the obvious, and that is, even if we're going through a rough patch, America, remains an import- an enormously important partner for us. In any given topic, the, it's better for us to have America on our side than being on the other side.

it will always serve our interests, if we are, if America is aligned with what we want to achieve than if it's not. That's a fact. Let's not, forget about that. On the other issue, it's true, we are seeing, an American foreign policy revolution. It's not the first one, we've seen others, but I think it's fair to say that it's the first foreign policy revolution where the transatlantic relationship, is also targeted.

It's remained intact in previous foreign policy, turns and foreign policy, uh, upheavals. but this time, the relationship, and the infrastructure and architecture and rationale, of, the transatlantic relationship and of the alliance, is also in the crosshairs.

And targeted, what do you mean by that?

America is no more convinced, that, or many Americans are no more convinced, that investment into collective security and into the security of allies actually serves America, uh, America's interests, a- and serves American security and, serves American global power projection. that may be the case because, the global political landscape has changed.

America- the American focus, is moving elsewhere. It's moving, to those regions of the world where it is, seriously and fundamentally, challenged. and that means that, uh, Europe, is no more the epicenter of American geopolitical posture.

And this was of course very different after the Second World War, after 1945.

And before we dive into all, of the issues that you've just touched on, maybe we can just go back for a second because if there is one soundbite that captures that golden age of transatlantic, relationship and unity, it might be this.

Today in the world of freedom, the

proudest boast is Ich bin ein Berliner.

to a younger audience out there, what did we just watch?

we watched, uh, John F. Kennedy in Berlin, saying, to Berliners, saying to Germans, a- actually, both Germanys, that America, saw security and, and policy of Germany as part of its fundamental interest. So it was hu- it was brilliant actually.

It was hugely, emotionally touching. your concerns are our concerns. That's the subtext of what, the American president said at the time.

So where did we lose those emotions?

I'm not sure we lost the emotions. but, look, face it, President Biden will have been the last American president whose foreign policy compass, and whose foreign policy prism, had been shaped, by, the, by the Transatlantic relationship by Europe.

that was the epicenter, of American, uh, global foreign policy posture. And every future president from whatever party will have been shaped by the experience of the dramatic rise of China, will have been experienced- will have been shaped by the experience of terrorism, will have been experienced, by the technological revolution, and will have been shaped, by the return of a great power competition, again, the focus of which will not be in Europe anymore.

I want to look with you at how the mood in Germany has been changing as a result of this feeling. You just described Joe Biden essentially as the last president with this core understanding at heart, at the heart of his foreign policy directives, but also his very own personal convictions, his, very own personal priorities, that Europe and particularly Germany as Europe's powerhouse is central to American interests.

So the mood here in Germany has changed when it comes to America. A poll in January this year said that 15% of Germans only say that the US is a reliable ally. 76% argued it's not. We asked a couple of people here in the streets just to get an idea, what people were thinking to just underscore these, these- the figures that I just mentioned.

For me right now, the

US is the greatest threat to our democracy, for liberal norms, for a better path into the future.

I'm the father of three children, and that's one reason why we won't be going to the US anytime soon, because you never know what will happen there.

So what strikes you, Ambassador, when you hear that?

I think if you talk, to friends in America, the take would be completely different. It is true, that we do see, a lot of unpredictability right now, and, there are a lot of questions linked to, the way forward. That all is true. But I do wonder to s- to some extent, whether, being thrown off the comfort zone, is actually, part of the Amer- of the German, uh, reaction.

There's a bit of psychodrama, uh, there as well. Because let's face it, this is not only about the present administration and about, uh, the president. the mood has changed in America, and we should really take that in. And the mood is, as I mentioned before, people don't believe anymore in globalization and free trade, and interdependence.

They don't believe it's good for them. They saw what it meant, what it meant for their industries. they don't believe in paying into, global common goods anymore because they saw, what the overstretch meant, for America. And I think we've taken some time, to actually realize, that, what we were doing and what America was doing, and, against the backdrop of the changed geopolitical landscape, it was like a wrongly fitted shirt.

And I think we now have to make sure that we get the shirt, uh, buttoned, rightly, and that's something we'll have to do. uh, will be- that will be uncomfortable. it will demand a lot of us, but let's face it, that's what we need to do-

I'm just- ...

instead of complaining.

We should say the overwhelming contribution to that alliance, both militarily and financially, is from the United States.

But wouldn't they spend that money whether or not they were members of NATO? The

big benefit that the US gets, or one of the huge benefits that the US gets, is the ability to what's called power project, in its current form. and they would lose that cost benefit if they were to leave the alliance.

can you give me an example of that?

I can. The US relies critically on intelligence that comes from the Nordic countries. A- and that intelligence pertains to the movement of Russian submarines coming out of Murmansk. Russia's nuclear deterrent when it comes to the submarine, those submarines are based at, Gadzhiyevo Naval Base, which is near Murmansk.

Now, when those submarines come up the estuary, the Nordic countries have intelligence that tracks those submarines, 'cause those submarines won't be submersed at that point. They'll go deep once they get into deep waters into the high seas. and this is really critical because the nuclear missiles on those submarines, they're not pointed at Oslo, they're not pointed at Stockholm, they're not pointed at Helsinki.

They're pointed at LA. They're pointed at Miami. They're pointed at DC. They're pointed at New York. and I think that's one of the most compelling reasons in terms of intelligence that I've heard in a long time.

Were the US to withdraw, then of course the rest of the alliance would lose what they bring to NATO as well.

And, th- there's no covering this up. There's no masking it. It would be an enormous loss to the alliance. and, Europe realize that, and I think we realize that. So what is that? So we're talking about most of the nuclear deterrent. we're talking about strategic airlift and air refueling.

something that you would think, you know, is quite benign when it comes to warfare. Absolutely critical to conduct the type of operations that we've seen over Iran. The Europeans couldn't provide that air refueling capability during the war in Libya, so it is a, what we call a critical vulnerability.

they would lose the intelligence, which is huge, ISR, intelligence, surveillance, and reconnaissance, and crucially, the space force that provides a lot of that intelligence on GEOINT, for example, geo intelligence. global strike and bomber capabilities. we've seen the B-2s, you know, dropping huge bombs over Iran, the B-1s and the B-52s based out of Fairford.

Europe doesn't have a strategic bomber capability like that. And then actually going back to the command structure, I think that's another key point that we don't, we don't focus on too often. So the US does have a lot of leverage over other members of the alliance, but I wanna come back to the strategic interest the US has in this alliance because the best argument, I think, and we were speaking about this, for remaining, comes from analysis of what the US gains from the current status quo.

And the best way to see that, I think, is initially we should look at the map, or we will look at the map and the bases to which the US currently have access. So let's start with Canada. four bases. This is the North American Aerospace Defense command, NORAD as it's commonly known, and it's an air defense network deeply integrated across, the US Canadian Arctic.

it's got three core missions, aerospace warning, aerospace control, and maritime warning. and it's got four bases that we can see on the map here. You've got two in the west, one central, and one out in the east. And why they're critical is that you can deploy US fast jets to those, and the purpose of that would be to intercept ballistic missiles coming from the east.

And on the edge of that map, I can see Greenland. Yeah. part of the Kingdom of Denmark, of course. Crucially important to that defense posture you're outlining there. In fact, so important Donald Trump thinks it should be part of the US sovereign territory.

Yeah, and we've seen a lot of posturing on that.

the key base there is called Pituffik Space Base, in Greenland, and you can see Pituffik literally just high up on the western side, of the Greenland ice shelf. why that's important is i- it's US operated and it's important to say that it's not US sovereign territory, and it has such importance because the shortest routes between North America and Russia is over that territory through the Arctic.

So Pituffik Space Base provides missile warning, space tracking, and Arctic surveillance, which are key.

Let's come further east To Iceland

Yeah. We've got, Keflavik, airbase there. This is key because effectively the base gives NATO eyes onto what's called the Greenland, Ice- Iceland, UK gap, and this plays a critical role in the monitoring of Russian submarine activity and the air traffic between the Arctic and the Atlantic.

And sometimes we can see Russian strategic bombers, Russian intelligence aircraft coming all the way over the Nordics and probing those areas.

And under what basis does the US have access to Keflavik and the bases in Greenland?

Yeah, they're memorandums of understanding. they operate these facilities under treaty agreements, either through an agreement with the host country or under mutual defense agreements that come with NATO membership.

Again, important point to note, this is not US territory.

Whi- which brings us to the UK and to Europe What locations does the US rely on here?

Yeah, let's start with the UK. Let's start with a map. now, viewers may have seen or are very familiar with these names, based off, Operation Epic Fury.

Let's start with, RAF Lakenheath. These bases give the US an ability to power project predominantly across the Middle East, uh, North Africa, and the Russian Federation, or at least to deter. And in the most recent example, these bases have been key to operations as, as I say, not just on Operation Epic Fury, but also on Operation Midnight Hammer last year.

It's home to the US's 48th Fighter Wing. It's the largest fighter wing in Europe, and it operates four combat-ready squadrons, the F-15 Strike Eagle, which you can see in the top of the picture there, and the F-35 fifth generation stealth fighter.

And to the point, because the US is a NATO member, it can rely, in normal circumstances, on other bases here in the UK that i- it would have access to under treaty agreements.

Yeah, and I think, RAF Fairford, down in Gloucestershire, that's a good example of that. Let's just, take a look at where RAF Fairford is. These US assets here at Fairford, and we're talking about the B1B Lancer, and the B-52, the strategic bombers that we were talking about, they are not permanently based here.

They are forward deployed, and the criticality of this operating base is huge, 'cause we've seen so much activity of B1s getting airborne out of Fairford to conduct missions on Iran, and the B-52 strategic bombers as well. they're, they're carrying precision-guided cruise missiles.

Okay, let's move into, Europe. Most of our viewers will know that for many years now, Ramstein Air Base in Germany has been the, the center of gravity really- Yeah ... for US operations around the world.

But it's down in the south west of Germany. I think we can take a look at a map, just to show the viewers where it is.

and it serves as the headquarters for US Air Forces in Europe, USAFE, and NATO Allied Air Command. And crucially, there are also some medical facilities there for medevac, medical evacuation, as we call it, specifically for US soldiers injured in combat, and it was particularly critical for US operations in Afghanistan and Iraq.

And also located at Ramstein is some of the most important communications, intelligence, and C2 command and control networks. So it really is a hybrid of capability out there, but predominantly based in the headquarters air command-

Okay ...

space.

Who pays for the US bases in Germany? Because Trump likes to tell us that they pick up the bill for this.

look, it's quite obviously the US- do pick up a, a fair chunk of that bill. and we'll come back to more spending in a bit. But I think it's also important to know that the Germans pay for the infrastructure. They pay for the l- the land, the utilities, any locally employed contractors, the Germans will pick up the tab for.

and the numbers we're looking at really, I think Germany has spent over $1 billion over the last 10 years, supporting US bases in Germany.

President Trump is threatening to draw down US troop numbers in Germany. In fact, he announced on social media not many weeks ago that 5,000 troops were heading to Poland.

Do we have any clarity on whether that is a straight redeployment from Germany?

I think the word is ambiguity. There's actually a, a lot of ambiguity of what the US, operational plan is, if you like. and I know that because I've spoken to a, a, a number of senior commanders in- inside NATO who just don't have the fidelity on what's going on with that.

And there's real confusion over the deployments. If you look at the map of the United States, we can look at a, a graphic here of, Permanent US troops in Europe. you can see that right across the map, and in the biggest countries such as the UK, Germany, and Italy, they've got a real significant presence.

The countries in red, tell us that there are well over 5,000 troops each. although a- again, it's well worth saying that when you look at trends since 1955, we are well down on where we were at the height of the Cold War. I think we've got a, a nice little graph that, that shows the decline of permanent US troops.

And just to cover that briefly, you can see in 1955 it was over 400,000. Then you can see a, a... In 1989, you can see a, a huge decline back down s- down to 100,000 End of the Cold

War.

End of the Cold War, exactly. And then out to today you've got, just under, under 66,000. So I think that's quite a poignant graph in terms of where we're trending.

What I find very striking is that we've talked a lot about US-German ties now. We haven't mentioned Donald Trump at all. and there are enough political talk shows about Donald Trump, so this one doesn't need to be one of them. And- You've also said already that, we won't go back to normalcy. So if Donald Trump disappeared from politics tomorrow, which problems would we still have?

I mentioned the structural reasons, why the transatlantic relationship is no more center stage. That will continue to be the case. What also will continue to be the case i- is there is a lot of distrust, or a disinterest, in America's role in stabilizing, global order and, the American resources that are required, to do so.

What I found interesting, was the comparison of a poll, that was taken, back in, I think February of 2020, which was the last year, of, President Trump's first tenure, and a poll, taken in February 2024, which was, the last year of the, of President Biden's, tenure. And in 2020, 53%, it was a Gallup poll, 53%, of the respondents said, they were satisfied, with the American, uh, global role.

And four years later, in 2024, it was 33%. That was- 33 ... 20% less, and that was, after four years of the apparent return, of America to traditional, alliance policies. I think it was a very tough verdict, on American foreign policy traditionalism.

And I think, that is a perfect segue to what, our colleague, the head of our Washington bureau, Ines Pohl, found when she spoke to Americans and asked them about, US-German ties.

There are, of course, the repeated remarks by President Donald Trump criticizing Germany for not paying what he calls its fair share for NATO and for not being supportive enough of the United States, including during the conflict with Iran. Some voices within the MAGA movement also, have expressed their sympathy for Germany's right-wing party, the AfD, adding another layer of tension, to the relationship.

But there's another side of the story. Many lawmakers, especially those representing states with close economic ties to Germany, have a much more nuanced understanding of the transatlantic relationship. They see it as a modern partnership based on shared interests, economic cooperation, and common strategic goals, rather than one rooted only in historical obligations.

But then there are, of course, the American people. I'm here at the state fair, part of the celebrations marking America's 250th birthday, taking the opportunity to ask visitors what they think about Germany.

I love the freedom that we both have. Not everyr- not everyone in the world has the freedoms that we have, and I'm so appreciative of the German people and the American people allying together so that we can protect that freedom.

I think that, America has done a lot for Europe and, I think a lot of Europeans are grateful, and I'm glad, and they should be, and we're grateful to have the relationship with Europe, and I love Europe.

I think a lot of people I talk to say stuff about America that is not true, and I try to tell them, if you wanna hate America, watch the news.

If you wanna love America, drive through it. Explore each state, become friends with the people."

I work in the energy space, and I think that, we've tried over and over again, and the regulations are just so complex that it's... We would rather spend our money elsewhere than spend our money in EU.

The German American relation is probably not as good as it should be, but I think the World Cup and what it has shown us is that when people of different nationalities get together, we can all come together and celebrate and have a good time, be proud of our nations, and just be kind and loving to each other and be accepting of each other.

So you see, whatever you think about the World Cup, but this is a huge topic here, and everybody we are talking to tells us how important it is to bring people together.

I saw you nodding there, Emily Haber. Can, can you just, share with us what went through your head when you were watching this?

I, I thought it was brilliant actually. D- different voices, all very positive. and, I felt it, was a significant contrast, to the, critical, skeptical, and sometimes complaining mood, that you can observe in Germany.

And we haven't touched upon, what some people are hinting at. Germany owes a lot to the United States.

Most experts would agree that modern-day Germany, especially the y- reunified version of it, wouldn't exist if it hadn't been for the US's role after the Second World War, where not only did they give the, the descendants of the Nazi, perpetrators a big chance to return to the international, community, but they also invested their own money, right?

So are Germans ungrateful?

I'm not sure they're ungrateful. I think everyone realizes, the huge, step America had taken, when only a few years, after the war, it stepped in to protect, uh, Germany and protect Germans. think of the, airlift. But here again, I would, state the obvious.

times have moved on. Americans have moved on and so have we, and what we need to do is to focus on, as Ines Pohl said, focus, on, shared interest, where we want to move together. what's the way ahead? that's what the new transatlantic relationship, is about.

But when you say times have moved on, Donald Trump argues that Europeans, Germans especially, are still freeloading when it comes to being protected because they're not protecting themselves.

They rely on the nuclear umbrella.

Yes, but our contribution to NATO is the second-largest in NATO. I think that is not reflecting reality if he says it's, uh, far below par. It's simply not true.

And of course, we're recording this podcast, it's important to say, before the next big NATO summit next week where- Yes

nobody knows what's going to happen, if Donald Trump is going to stick around till the end. We'll have to watch all of that. but I want to bring in, the sort of more, strategic analysis by my other fellow podcast host, Michaela Küfner.

Germans have admired the United States in the past. They didn't mind much that there is an economic, but particularly also a strategic dependence on Washington.

All of this changed with the arrival of US President Donald Trump, the first and the second time around. Doubts were growing whether United States truly is the world power still standing in for freedom around the globe. In recent months, we saw German Chancellor Friedrich Merz not speak out vocally to defend international law in the hope that he could keep Donald Trump at his side, also at Europe's side.

The big question now, and a lot will depend on this, is whether this Trump America is the America that will remain for the future, whether this is the new American baseline, or whether the US will find back to a path of global cooperation and valuing and trusting its allies in Europe across the board.

Germany has been described as like the logistics hub of NATO, and the reason for that is r- if Russia attacks the Baltic states, and if Article 5 gets triggered, and we have the regional defense plans, NATO now is, trying, To really have a forward defense, like to stop an attack, as it happens, but still you would need reinforcements, right?

So you would need American soldiers, other soldiers to be brought to the Baltics. and Germany happens to be at the center, and troops would need to move through Germany in the hundreds of thousands. We have

borders with nine countries.

Yeah. Yeah.

Yeah.

Yeah. So there would be a lot of logistics.

Like Deutsche Bahn would be needed, the ports would be needed, Bremerhaven would be absolutely crucial. and then if some, soldiers get wounded, for example, they would be of course treated there, but, if capacity is not enough, they would ne- then be moved to Germany and treated here as well. So a lot of stuff would need to happen here, water, energy, infrastructure, all of that, right?

Germany has the Oplan Deutschland, the, Germany operations plan, let's say. and in there it's secret, so we don't know details, but we know that it sets out a plan for this kind of scenario. And in order to invoke certain measures and certain laws, it's quite diffult- difficult to achieve that because, the, the, the Spannungsfall would need to be invoked.

Th- this is like the state of tension. You translate it state of tension. Yeah. Or even Verteidigungsfall. So state of tension can be invoked by parliament, by the Bundes- Bundestag if Germany thinks that an attack is, possible imminent, right? and then in this kind of scenario, it's easier to invoke the emergency laws.

So it's a state of emergency basically, right? but you need a two-thirds majority in the Bundestag, and the- Mainstream political parties do not have that majority now. in our war game, it still got invoked, right? The adjudication or white cell, the team that led the war game, the German War Gaming Center took this decision.

and that was a lot already for the blue team to achieve, right? So what they did was saying like, "Okay, we need, in the Spannungsfeld, in the state of tension, you can tell certain companies you need to primarily produce for the Bundeswehr. we need Deutsche Bahn to transport primarily soldiers," and that's massively interrupting civilian life, right?

This is why the thres- threshold is so high, because it should not, this decision should not be taken light-hearted. But Germany was looking at the situation, the blue team, sorry, in our war game was looking at the situation saying, "We have a war in Europe. We have a security crisis. What's Germany's role in this scenario?

We become the logistics hub, so we prepare our country for American, mostly American troops to move through." But American troops were not coming. So they were following the plans. I think Germans are very good at that, right? But they were not looking at the bigger picture, like what is Russia trying to achieve, and what is our own options here?

And what are the Americans actually going to be doing, right? Yeah. that is, wasn't that the other key question? Yeah. Apart from getting Russia wrong, they also had no idea what the American administration would decide to do, right? they were in contact with the actor who played the, American,

Secretary of State

administrative secretary of state Yeah, Jeff Rathke. Yeah. Yeah, exactly. He's a former NATO and US diplomat, and I had long conversations with him even before the war game to anticipate how might a Trump administration present itself in such a scenario, because we don't know. And again, it would be wrong to assume that we predict any sort of reaction, right?

We are not doing that. We're just asking, how would Europe, how would Germany react if Americans did not step up? And I think the necessity to ask this question is very obvious, right? at the NATO summit, Trump in the end was a bit more conciliatory than people had- The

real NATO summit- Yeah ... just a couple of weeks ago.

The

real NATO summit, yeah. Yeah. But still, Greenland was put again on the table. the ceasefire in Iran was ended. Trump was, was heavily criticizing Spain, right? So you can just not know- ... what this ad- administration is going to do. so yeah, we had Jeff Rathke in the war game, and he was saying, the US was very hesitant to give a strong military reaction because in our war game, importantly, there was a ceasefire in Ukraine because most experts say that this- is the prerequisite for further military action of the Russian, armed forces and government to do something outside Ukraine because it frees up capacity, right? So- It

buys time as well, right?

It buys time. and we had a ceasefire in Ukraine in our war game, and then after that, there was the limited military- Limited military incursion into Lithuania.

and the Americans in our scenario were the brokers of the ceasefire. So the imagined, American administration was saying, "Look, we thought we solved the security issue in Europe, and we're not prepared to have another scenario like that. So let's all calm down, wait and see. we don't think it's in Vladimir Putin's interest to have another war," right?

That was what happened.

But if that is the assumption, then surely the blue team could have understood that the Americans had already decided to not be treated like a full-fledged NATO member in the sense of, oh, yes, there's a war in Europe. Let's go. Send everybody in to deter Russia as much as possible.

There were mixed signals, as in real life, like the US president was saying one thing, the Secretary of State was saying another thing. then we have the Pentagon. So it was not clear how the, the Americans would react. But in such a scenario, it's just important to move very quickly, because if you don't...

if you don't act, someone will act for you, right? And that's also what happened in the war game. So I don't think that the German government was naive in thinking that the Americans would step up. but they still expected it, or they weren't used to Americans not stepping up, right?

And I think we also saw that, when it came to military support of Ukraine, and Roman, you would know this better than I do, but, that was a situation where Europeans really had to, sort themselves out and see, oh, what can we do without a strong American support, and we're still in the process of seeing that.

now the coalition of the willing has, announced that there will be military exercises in the fall, right? I don't think Germany will be part of that. What happens if in France, we have a different government, and what if in the UK, Burnham decides that he focuses more on the UK, right? What happens to the coalition of the government?

What is Germany's position in that? we have very real-life examples for these kind of conversations that also happened in the war game, and I think what we learned is that we're not yet there to be fully prepared for such scenarios.

just one point, if I may. you've just said that the prerequisite was a ceasefire in Ukraine.

in all scenarios, this is the case, but I would caution, to see it as a given Because at the moment, as things are running for Russia, and they're running not good, it's not just a stalemate, on the battlefield, but also Ukraine is attacking Russia more and more, so the Russian population is feeling the-- So war is coming back where it came from for the first time, massively, and Vladimir Putin is under enormous pressure at the moment from inside Russia, so he has to do something.

uh, as long as the war against Ukraine continues, he might be tempted to attack, for example, a factory in Poland or in the Baltic states where, for example, drones for Ukraine's, for Ukraine are being assembled or some-- or munition depots in these countries. Would this tri-trigger Article 5? This is s-a scenario we need to talk about because it is, I think, more realistic at the moment as we speak.

And the political situation in Europe, we've been talking about and I've just mentioned it and you as well. In Britain, there is this transition of government. In Germany, elections in September in, uh, Sa- Sachsen-Anhalt, where the far-right AfD could be the winner for the first time and could have its own government, which would weaken Germany, which would be, I, I hope it will not paralyze the federal government, but it will be a major blow for this government.

Next, Section B, The China Factor

broadly speaking, European policymakers have two issues with the EU-China economic relationship at the moment. The first is general concern about China's trade imbalances.

As you probably already know, China runs a persistent trade surplus. That is, it exports more stuff than it imports. In 2025, for instance, China ran a trade surplus of more than $1 trillion, more than double what it was only five years ago. Lots of policymakers in Europe and elsewhere see this as evidence of China's unfair trade practices.

For context, persistent and large trade surpluses like the ones we see in China shouldn't really happen, at least according to orthodox economics. After all, when you export loads of stuff, this either means you get lots of foreign currency if your exports are priced in foreign currency, which you can then use to afford more imports, or it creates demand for your currency if your exports are priced in your currency, which should thus appreciate and allow you to afford more imports.

Even if it's true that Chinese industry is great and the world thus wants lots of Chinese exports, in a functioning economic system, this should just mean that China can afford a lot of imports. Not only is this not happening, but the subsequent trade surplus also looks like a deliberate policy choice from the CCP who have continued to actively devalue their currency while explicitly pursuing a policy of economic self-sufficiency, which means less imports Now, it's probably worth mentioning that European policymakers haven't really been entirely consistent in their outrage here.

European policymakers and politicians weren't that fussed about China's trade surplus in the 2010s when American politicians first started complaining about it. This was at least in part because the EU was actually running some pretty big trade surpluses itself. In fact, relative to GDP, the EU actually ran larger surpluses than China for most of the 2010s.

However, as Europe's overall trade surplus has shrunk and its bilateral trade deficit with China has grown, European politicians and policymakers have suddenly become a lot more interested in China's alleged imbalances. Quite a lot of this has to do with Trump. Trump's tariffs have both hurt European exports to the US, bringing down Europe's overall trade surplus, and caused Chinese exporters to redirect their exports away from the US towards the EU, increasing the EU-China trade deficit.

Anyway, alongside this generalized anxiety about China's trading imbalances, this second point of tension in the EU-China economic relationship is that China is putting pressure on certain specific and politically sensitive European industries. The most obvious case is cars, where Chinese upstarts like BYD and Chery have been gaining market share in both Europe and the rest of the world, especially when it comes to electric vehicles.

This has provoked real anxiety in the EU. The car industry is not just economically significant, cars are the EU's biggest single export, and the industry employs millions of people. It's also politically significant and central to Europe's sense of itself. Chinese companies also dominate in green industries in clean tech, where Europe was once a market leader, and which was supposed to be the basis for Europe's reindustrialization via policy initiatives like the Green New Deal.

China's clean tech exports have grown steadily for the past couple of decades. China now accounts for the vast majority of Europe's solar panel and battery imports, while its clean tech imports have actually declined since about 2016. China's growing industrial dominance is not just bad news for European exporters and the European economy.

It's also created some uncomfortable dependencies in certain strategically significant areas. Like everyone else, Europe is very dependent on China for rare earths, 17 metallic elements that are critical for modern technologies, whose processing and production are dominated by China. European drone manufacturers also rely heavily on Chinese imports for their components, and China accounts for a large and growing share of global steel production.

So you get the idea. European policymakers are both worried about China's overall trade imbalances and about how China's industrial prowess is undermining certain strategically significant industries. This all raises the question: what can Europe actually do about any of this? somewhat confusingly, we're gonna start with the second problem, the threat that China apparently poses to certain strategic industries in Europe.

The first thing the EU has to do here is to decide which industries are actually, quote-unquote, strategic. European politicians generally agree that Europe needs to defend its strategic autonomy, but this disguises the fact that there's a lot of disagreement over what strategic autonomy actually requires and which specific industries require protection.

The French, for instance, have a notoriously expansive understanding of the term. In the 2000s, they famously prevented PepsiCo from acquiring the French yogurt company Danone on strategic grounds, with the then Prime Minister describing Danone as a flower of French industry at the time. Traditionally, Germany has been on the other end of the spectrum, less willing to intervene in the economy and more willing to let the market do its work.

This ideological gap has become apparent in the ongoing debate over European rearmament. France wants EU member states to spend their new defense budgets in Europe on European-made systems, while Germany has been happier to spend these new monies abroad on, say, American or Korean-made systems. The point we're trying to make is that before retaliating against China, the EU needs to actually align on which industries are actually strategic, and then the EU can impose targeted protectionist measures, like tariffs on Chinese exports or subsidies for domestic companies within those industries to either encourage domestic production inside Europe or at least encourage diversification away from China.

European politicians should also make it clear to their electorates that this won't be painless. Protectionist measures will effectively make Chinese imports more expensive for consumers at a time when inflation is already running hot, thanks to Trump's war on Iran, and China will probably retaliate, as it did against Trump's tariffs.

When it comes to the more general issue of China's trade surplus with not just Europe, but also with the world more widely, Europe doesn't have that many great options. The EU could impose some sort of flat tariff like the US has, but this wouldn't be great for the European economy and would probably provoke a dramatic retaliation, as happened after Liberation Day.

This is a reminder of why we created multilateral institutions like the WTO in the first place. To resolve any big and persistent trade imbalance, you need to get both the surplus and deficit countries round the table.

we're not trying to take a position on whether the EU should or should not fight a trade war.

We're just trying to say that if it does, it's not necessarily doomed. That's because, as we see it, there are at least four reasons to think that the EU has more leverage over China than is generally assumed. The first is that after the trade war with the US, Chinese exporters, and thus the Chinese economy more generally, have become increasingly reliant on the European market.

For context, we often talk about the US-China trade war and the trade truce that emerged from it as an issue that's somewhat been resolved. But while it's true that each side's tariff rate has come down from the triple digit highs we saw in the immediate aftermath of Liberation Day, the US still has some pretty steep tariffs on China at the moment.

According to analysis by the Peterson Institute for International Economics, the average US tariff rate on Chinese imports currently stands at about 47.5%. Again, way lower than the post-Liberation Day peak, but more than twice as high as it was under Biden, and more than 10 times higher than the average rate under Obama.

This is actually one of the big reasons that the EU has suddenly become so anxious about China's overcapacity. China has reacted to these outstanding US tariffs by redirecting exports away from the US towards the EU, which is basically the second biggest consumer market in the world It's also worth saying that even before Liberation Day, China was relying more and more on European consumers to absorb its export surpluses.

According to OECD data, for instance, the share of all Chinese manufacturing exports going to Europe rose from about 13% in 2012 to 17% in 2022, the latest year for which the OECD has data, and will have risen further since. The point we're trying to make is that the ongoing trade war with the US has accelerated a preexisting trend, and actually made Chinese exporters more reliant on the EU, which has essentially become the consumer of last resort.

This is especially true for high-end Chinese exports, which are probably too pricey for middle class consumers in, say, South America or East Asia. Limiting access to the European market will thus cause more trouble for Beijing than it might have done before Liberation Day, when China would've been able to redirect some of its affected exports to wealthy consumers in the US, which gives the EU more leverage in any trade war.

The second reason on our list is that the Chinese economy currently looks pretty weak, at least domestically. The latest data, for instance, suggests that retail sales fell by 0.6% year on year in May, the first decline since December 2022 when COVID was sweeping through the country. Similarly, fixed asset investment was down 4.1% year on year, the worst result since May 2020.

The one silver lining in the data was exports, which were up 19.4%. But while this might sound great, this combination of falling retail sales, which basically measure domestic demand, and rising exports suggest that Chinese companies are becoming increasingly reliant on foreign demand. Again, this gives the EU more leverage in a trade war because it means that Chinese companies can't easily redirect any affected exports back to Chinese consumers in their home market, given the weak domestic demand.

Anyway, the third reason to be optimistic about Europe's prospects in any upcoming trade war is that Europe already knows how China is going to retaliate. Beijing is probably gonna restrict rare earth exports, as it did to great effect during its trade war with the US last year. For context, rare earths are a set of 17 metallic elements that are used in a whole load of high-end technologies.

As you might already know, China absolutely dominates the entire supply chain, accounting for about 60% of all rare earth mining globally, and more importantly, over 90% of all processing. When the Trump administration started the trade war last year, Beijing responded by both imposing reciprocal tariffs, but also by restricting the export of rare earths.

This sparked panic in America's business community, who warned Trump and co. that their supply chains would freeze up unless Trump could negotiate some sort of truce. This obviously worked well back then, but it means that this time, the EU knows what's coming, and thus should be able to take precautionary measures.

Most obviously, European countries could stockpile rare earths, as Japan has done since 2010 when China first weaponized its rare earth dominance and halted exports following a maritime sovereignty dispute between the two countries. It's also worth noting that since the US-China trade war, other countries across the world have taken steps to reduce their singular dependence on Chinese rare earth exports, which means that the market is becoming more diversified all the time.

Anyway, the fourth and final reason on our list is that Europe has its own choke points that it can weaponize in response. Most obviously, China still depends on lithographic machines from Dutch company ASML for advanced semiconductor manufacturing, a sector where the Dutch company holds something like 90% of market share.

The EU could further restrict ASML exports to China, although this would probably invite retaliatory export controls on other semiconductor inputs, which is how China reacted last time the West restricted its trade with ASML. Alternatively, Europe could also restrict exports of certain machine goods, including high-end CNC machines, bearings, and engines, sectors that are still dominated by European companies.

Finally, the EU's Aviation Safety Agency, which is in the process of assessing China's COMAC C919 aircraft, could withhold certification, which would severely constrain the C919's market access. All in all, while a trade war would be far from painless, the EU would do well to remember that it does hold some cards, and might thus be able to squeeze at least a concession or two out of Beijing.

China stopped importing oil just to protect themselves from high oil prices.

But you know what? This one doesn't hold up. Here's why in one number: $74. That is the average replacement price on China's oil reserves that they have been burning up. Here's the price of oil over the last six months, and here's where the price dropped below $74. If China was just trying to protect itself from price shocks, this is the point that they would've started buying again.

They would've actually made a profit by buying at this price, but they didn't. They just kept burning reserves, which means they had some other motive, right? So second wrong theory we need to rule out, this was all a soft power play for global goodwill. I'm sorry about the panda. I know it's a total cliche.

When you Google image search Chinese soft power, this is the first thing that comes up, so I don't know, I went with it. Anyway, it's also wrong. This soft power theory does not square with China's big ban against its refineries exporting jet fuel or gasoline, because this really hurt the neighbors in Asia who count on China for that stuff and are the exact countries China most wants to improve its standing with.

For another thing, remember, China did all this and didn't talk about it. If you save the world to make countries like you, wouldn't you, I don't know, mention it at least once instead of hiding it in secrecy? So these theories, I think these are out. So now let's look at the theories that do make sense, starting with the big one, Taiwan.

Here's Asia, and here's the Strait of Hormuz, which we learned controls 20% of the world's oil flows. And now this is the Strait of Malacca, even narrower, even easier to close. The ships that go through here carry 80% of all China's oil. And in any war scenario with Taiwan, one of the very first things that happens is the US uses its naval supremacy to close Malacca, like Iran closed Hormuz, shutting off China from outside oil and bringing China to its knees

So yeah, pretty powerful, right? Defeat China without ever coming within a thousand miles of it. And this has obsessed China's leaders for decades. They actually have a name for it. They call it the Malacca dilemma, and it applies to any war scenario with the US, but Taiwan is probably the likeliest. So how can you neutralize the threat of suddenly losing access to outside oil?

one way is to build up renewable power sources like wind and solar, which yeah, check, China has been doing. Another is burning more coal, check. But the best way is to stockpile so much oil in advance that you can go without imports for a year and keep the lights on for as long as the war takes.

Under this theory, China had this whole no oil plan ready in case of war, but they pulled it off now both because they could, and maybe as a little demonstration to the US and Taiwan that the Malacca problem is solved just to threaten them anymore, so don't expect them to hold them back. Okay, ready for theory number two, leverage with Donald Trump and Xi actually just had a big one-on-one summit in May, and, watching this, it's not hard to imagine Xi telling him, "Hey, Donald, I'm single-handedly saving your economy right now by absorbing the oil shock so it doesn't hit the United States.

So you want me to keep this up? You better make it worth my while." Because he knows if there's one thing Trump has shown he's sensitive to, it's the price of oil. Now, nobody can prove this happened. Yeah, a few weeks beforehand, the US did withdraw a bunch of missile defense and other weapons from China's periphery, which China liked to use in the Middle East, but that might be a coincidence.

I would consider this the softest theory. Still, as long as the war goes on, Xi Jinping really could nuke the US economy anytime he wants by resuming Chinese oil imports and exhausting global supplies. Did he remind Trump of that fact when they met? we don't know. Okay, theory number three, and I'm pretty partial to this one, protecting China's export-based economy. China's economy, like we said, centers on manufacturing and exporting basically everything in the world.

Here's every country China exports to scaled by overall value Now let's cross out all the countries whose economy would implode in a sustained oil shock. this one, probably these guys, definitely the Europeans. Yep, here. Okay, China just lost half of its export market and a bunch of its economy with it

Or that's what would have happened if China hadn't propped everyone up for three months by absorbing the oil shock. Now, I can't prove that's why they did it, but I do think it would make a lot of sense. Okay, theory number four, they did this to prove to the world that China now controls the global price of oil.

I had to print this out on my home printer because the photo printer stopped working. That's why the Chinese flag is purple. I don't know. My apologies to China. Credit for this theory goes to a Bloomberg columnist named Javier Blas, who argued this was China unveiling its powerful new oil price weapon.

He compares it to the 1973 oil shock, when Arab oil states like Saudi Arabia and some others shut off oil to the US, a power that got termed the Arab oil weapon and made those states a global player ever since. And he argues that, yeah, on some level, this was probably about Taiwan and Malacca. But if China proved that it can flip 5% of the world's oil demand on and off like a switch, that gives them Saudi Arabia level influence over the world's most valuable resource, which gives them a lot of leverage over any country that buys a lot of oil or that sells a lot of oil, which is pretty much all of them.

I think there's probably some truth to all four of these theories, right? I don't think they're mutually exclusive. Now, we don't know enough. We can't peer inside Xi Jinping's head and know, which one is the truest. But I think if you look at these four together, you have a pretty good understanding of why China did this.

So okay, so the question now is, what does all this add up to? What does it change about our world? And we, the world, learned a few new things here. One, China has neutralized the Malacca dilemma that would have allowed the US Navy to shut down their economy, and that makes war with the US more bearable for China and an invasion of Taiwan, therefore, more likely.

And two, China now has a lot of control over global oil prices, although I don't think we yet know how they would use that power except how they did here to blunt a global oil shock. But, the Iran war is still at a low boil, which means as long as Hormuz is at threat of closing or partially closed, Xi Jinping has a lot of leverage over the United States.

He has that button on his desk that says, "Nuke US economy." And along those lines, the US, China's big rival, it came out of this war weakened on the world stage in a lot of different ways that we talked about in the last video.

Russia, meanwhile, is still mired in Ukraine. That means that among the major world powers, China is looking pretty good right now, which is part of why there is a growing consensus that the war's real winner was China. China won. They're the winner. China's the big winner here. China wins

This is a little too clever, I think. Iran won the Iran war, but China did win something very big, and it's easier to explain if I put it on the board for you

So forever and ever, these have been the three world powers of oil for, the last century: the US, Saudi Arabia, Russia. They are the three biggest producers in the world by far. The US guarantees free flow of oil in the world's oceans and controls the US dollar. Saudi Arabia is the de facto leader of OPEC, the alliance of oil-producing states.

And Russia, in addition to being a world power and a huge exporter, controls land-based oil flows across a bunch of Europe and Asia. But this era might be over, or at least starting to end. The US proved in the Iran war that it cannot guarantee the global free flow of oil anymore, and Russia is under global sanction and can barely sell its own oil.

So these two powers might be out. And who displaced them? arguably, one of them is Iran, which is not the world's biggest producer, they're ranked seventh, but they proved that they can unilaterally turn on or off 20% of the world's oil supply, and nobody can stop them

And the other new global oil power, I think you know where this is going. I think you can make an argument for China. they control the price of oil now, or at least have huge influence over it because they can switch 5% of global demand on and off, and because they were able to do what the United States wasn't in this war, and secure sufficient flows of the world's most important resource, single-handedly saving the oil-burning world from disaster.

That sounds like the behavior of a global oil power to me.

Now, I don't know what China wants to do with that power. we have some educated guesses obviously, but they're not telling us. They might not even know. They might have themselves just discovered how powerful they are here right along with the rest of us. But one thing is for sure, now that they have this power, they've demonstrated it, they've proven to the world that they have it, I am certain this will not be the last time that we see it deployed

Now, Section C, The Tech Sovereignty Playbook

earlier, I was speaking to former Polish Prime Minister Mateusz Morawiecki. He's convinced the transatlantic relationship is basically fine a little off these days, but fixable. And not just fixable, he's saying we want more America, not less, and specifically he wants this economic NATO thing where, there would be a free trade zone among the NATO members, including the US, where everybody would align on their different regulations and everything.

He wants to see Europe really tighten the bond with Washington. How do Europe's mainstream leaders see it right now?

I think the idea of having such a such an arrangement with the US is a little farcical when you consider the fact that they have unilateral tariffs on the EU. Look, I think it's a pipe dream, and I think it makes sense from the perspective of Poland has for a very long time been very reliant on the US.

They have really strong bonds. They have strong security bonds. They have strong financial bonds. There's a large diaspora in the US from the Polish community. So I think it's the default position of Poland to be very pro-US, but that's certainly quite far away from the position of the European leader mainstream thinking.

What I'm picking up around town with diplomats from a really broad range of countries, even the Baltics to some extent, who have even more so perhaps than Poland been very US-friendly, I'm hearing people say, "We've got to de-risk. We need to make sure that we can stand on our own two feet," because the US under Donald Trump, but also I think beyond that, people are thinking beyond that, cannot be relied upon to provide security, cannot be relied upon to be a predictable ally financially.

So people are talking about ways in which they can de-risk themselves from the US in the same way that we've been talking about de-risking from China.

Yeah, that's where we first heard that term, that de-risking or decoupling, and indeed, that contrast really sets up the piece that you co-wrote. It's worth saying it was a huge newsroom effort with reporting from lots of capitals and policy areas.

But what were you and our colleagues trying to capture with the story?

We were trying to capture a change of mood because I think, there are those weeks where history happens all at once, and that's what it felt like happened between when Donald Trump first started raising Greenland again and his speech in Davos.

It was within the space of sort of three weeks, really. I don't even think it was that long. And I think in that time, Europe got a taste of what life would be like with a recalcitrant and anti-European leader in the White House who was willing to go so far as to even threaten military force to take a piece of land that does not belong to him and that belongs to Europe.

And so I think that was such a wake-up call, and various diplomats described it to me in different ways. People used terms like turning point. People used terms like breaking point in the relationship. So I think there's a real sense that this United States is a different beast from what we have been used to since the post-World War II era.

So yeah, I think there is a real mood shift among EU leaders, and they are starting to talk about ways in which we can decouple in all sorts of sectors from the US.

yeah, just last weekend we saw center-right European People's Party leaders gathering in Zagreb for a strategic discussion, and one thing that really stood out was how openly they talked about defense About the possibility that under Trump, NATO may no longer be a reliable guarantee.

What came out of that meeting?

So that was quite an interesting meeting. The European People's Party, it's the largest force on the European level. It's got the largest number of MEPs. It has the most European Council leaders. We've got German Chancellor Friedrich Merz, who's the most powerful, probably, leader among that bunch, also Donald Tusk from Poland.

And so for them to start talking about, amongst themselves, among these friendly leaders, start talking about ways in which the EU needs to basically act in order to stop relying on the US is pretty huge because we know that they have the power and the numbers to really make this happen if they decide they want to do that.

The other thing that happened in Zagreb is that the European People's Party has appointed two of their leaders, now we don't know who they are, they haven't been revealed yet, but two leaders have been told that their homework after leaving Zagreb is to go back home and to figure out how the EU's mutual defense clause might work.

Because in the EU treaties, there's this little-known, kind of obscure clause that basically some say could be an equivalent to NATO's Article 5, which guarantees mutual defense among allies. So there is a clause in the EU treaties which says that an attack on one is an attack on all, in essence. It's not the quote, but that is the essence of it.

And so that has never been used. I think it's a little-known clause, but we're hearing a lot more of it now. And so that's something that those two leaders are going home to figure out, how are we going to make this a bona fide deterrent, and how do we make it as good as that NATO clause?

Yeah, quite a weighty homework assignment.

And beyond the, the politics and the rhetoric, what would this shift that you've been describing mean in practical terms, especially when it comes to producing and buying arms?

It would mean that Europe needs to really very seriously start funding, increasing funding to its arms industry. It would need to essentially find capital, find investment.

The US, not only does it provide a large number of the actual equipment, it's also the microchips that drive that equipment, and that is really a problem for Europe. It doesn't really have much in the way ... Look, it does have some microchips. We do have some, some champions, but, it really needs to figure out what it's going to do on that because semiconductors are so vital for tech and for the defense industry that it's really difficult if you don't produce your own to de-risk and decouple from anyone.

Yeah, and beyond microchips, technology is a huge area where we're gonna see this shift play out of Europe trying to divest, essentially, from the United States. just reading your article, a few examples that stood out to me. In France, President Emmanuel Macron is planning to ban public officials from using American video conferencing tools like Google Meet, Zoom, and Microsoft Teams.

He wants them to switch to Visio, which is a French alternative. In the European Parliament, some lawmakers are pushing to ditch US software and hardware, including a US-based travel booking tool. In the Netherlands, there's a petition signed by 140,000 people calling on the government to block a US company from acquiring a state identity verification tool.

And at Davos, a German entrepreneur announced the launch of W, and that is the Europe-based alternative to Elon Musk's X. So what does all that tell us about where Europe's head is right now?

I think it tells us that basically Europeans are starting to think a little creatively, but the next step is actually developing tangible, real, and good alternatives for consumers to use.

So I think that's where we're at. It's going to be a difficult journey, I think, because W sounds great in theory, but starting from scratch and trying to get people on board is difficult. we've seen alternatives. It's not like they don't exist. We've got Blue Sky, we've got Mastodon. You don't see a huge groundswell of people in the political kind of field using those social media platforms.

So I think that's the challenge. We've got space to disrupt in Europe, but we don't necessarily have the companies that can do that disruption that, we need to fund basically. So it's a question of investment, it's a question of appetite for risk.

yeah, to that point, we're also starting to hear this phrase buy European, and we're seeing it put into some, public procurement provisions.

Yeah. This is a Macron baby. French President Emmanuel Macron has long championed this idea of "Hey, let's buy European." In weapons, that means buy French. of course, but also in cheese and champagne. But I think that's what this is. There is a growing realization among European countries.

We had this previous mindset of for consumers, the cheapest thing is the best thing. And you can understand why that is because cost of living is a thing. if you can get groceries cheaper because they've come from China or because they've come from wherever, that is an appealing prospect, but it's a sugar hit.

And in the long term, what you lose is the capacity to have an industry. This de-industrialization that we're seeing around Europe now, it's a huge problem and it's a concern. So this is where this buy European thing comes in. There's this renewed will, a renewed kind of campaign to get Europeans to care about where their things are made.

what's this all about? Why did we have suddenly this ban?

It's been a long time since the Trump administration didn't want Anthropic to, evangelize or to disrupt its own ecosystem with leftist thinking about not survei- mass surveillance for the Americans, not, AI, autonomous tools, and especially weapons.

So it's what we just heard about, Hegseth saying that, Dario Amodei is a lunatic, made the possibility for a backlash, and we are now seeing a backlash from the administration sanctioning that company. And indeed, there are risks for banks. You mentioned it earlier. There are risks for security, and I guess we'll talk about that, too.

But basically it's a political issue. And at this moment Trump and his, pundits want to have all the ecosystem behind his ideological choices, and not to, as they said with the, Pope, Leo, uh, create disruption in the, current narrative of the White House about AI and technology.

Rayna Stamboliyska, Dario Amodei and Anthropic are the good guys, and the, its rivals are the bad guys?

Is that how this works?

Look, I'll go into something totally different, not of the above. You're not

answering the question.

I am, but not the question you asked. let me roll back a little. What I'm most concerned about, and what is unraveling here behind all that lunatic and name shaming and things, is export controls.

I'm particularly concerned that we're losing sight of this particular level, lever, of, of influence in even, I would say, interference. So export controls have been there quite strongly since 2022. It's not Trump's doing.

However- So

export controls on cars are one thing, but export controls on cybersecurity are another.

It's export controls on technologies.

So the export con- export controls are ways in which you as the producer, main producer, or oligopolistic producer of specific technologies that are called dual use technologies, meaning they can be used in civil and in military situations. Those technologies are regulated.

Who can have access to them, right? And so since 2022, what we saw was export controls on GPUs, right? China couldn't access American GPUs. This has been widening to include weights for closed models. This is precisely the case for Anthropic's models. But also it's creeping in a way, if you want, towards cloud services being used to train models, right?

And that's where things get c- Less, spectacular in terms of, online debates and naming names. But ca-

actually, no, it doesn't because now, y- you're, we're getting back why are they doing it? Why are they putting these export controls on?

Because-

Is it politics as we were just- It's- ... a- as Bernard was just saying?

I'm not sure what he means under politics because there is internal politics, there is-

I'll tell you, at the heart of the- ...

foreign policy ... at

the heart of the ban, Donald Trump's AI tsar, David, David Sacks, one of the South African-born tech titans- ... who co-founded PayPal, and who according to reports, last Thursday, so a week ago, got warnings about a security lapse from a top executive at Amazon.

Yeah. And then, So- ... and then 24 hours later, voila, export controls.

Yeah, so if you like, there are different... There is a lot of FUD, and there is a problem with the current American institutional setup.

But it's not- There's a gang of people who were all at PayPal who are one side and Dara Khosrowshahi the other?

Part of it

is this. Is that what this is, it's about?

There is the chain of command, how a decision taken is absolutely unclear. And what came out, what transpired with the Anthropic situation is that there are, like, fewer than 10 people who ganged on Anthropic and gave an ultimatum of 90 minutes, that was said in the introduction that you made, that Anthropic must stop, providing that tech to people, including its own employees- Oh

who are not American citizens. American

citizens.

So that's where you get a situation where a tool of political power, if you like, that are export controls of technological industrial power, is being transformed and perverted into something very different, which is some guys with non-clear chain of command get to constrain- a privately owned company so far into its own inner workings, which is also, by the way, a clear stray away from Trump's we will never, meddle in companies' affairs.

Okay. Let's get one more reaction on this. Counting the punches of, from here in France, where he's returned after serving as Meta's chief AI scientist, Yann LeCun.

He posted this to LinkedIn. "Dario Amodei," this is the head of, Anthropic's, "ridiculous fear-mongering about Mythos fable," those- that's the AI models, it finally pays off." That's irony. "The US government bans its use by non-Americans, including by foreign employees in the US," as Rayna just said. "One reaps what one sows."

Yann LeCun, who's this respected AI scientist here, effectively saying- ... there are no good guys in this, in, in this fight that's going on over in the US. Yeah. do you agree with that, Alfred? I

think I, I think there's nothing really new under the sun. number one, it's not the first time that the US government, that basically all governments in the world ban or, limit the, the export of a tool that can have consequential national security implications.

And in the US, the concept of national security is much wider. We have an example which is very famous. Early 2000, it was even a, a Macintosh that was banned. And Apple used it in a, in an advertising, putting tanks in front of a, a Macintosh, saying both are a threat to national security, which... So they used that as an advertising.

and the third thing, let's not forget that three months ago there was- A general outcry, and despite what Yann, and he's obviously extremely respected, is saying, where really a lot of, people in the cybersecurity domain were worried about the potential capacity of Mythos to, to k- identify, uh, zero- Yeah ... zero days, that, that were, very deep buried into cyber systems. So it was to... the, the one thing that I think we should focus on, and which I think is the news, is number one, Europe was not informed. So for all those leaders in Evian that they think they still have an importance, no.

In the view of Washington, we are irrelevant- ... because we're not informed. Number two, the fact that we n- we see that as a surprise is just sloppiness. Because again, Mythos was, was suspended already three months ago. And the third thing is the illusion in which we live. I still hear people saying we are at the frontier.

No, the, the best, running model in, in, in Europe is, ranked 54th.

All

right. So I know if you... we ask French people, they always think that, that, one famous model, which I like a lot, is frontier. It's not the case. So i-i- bluntly in our face, our dependency has been, has been published.

What I'm worried is that since three days it should be code red in Europe, a conclave where no leader is coming out unless we find a solution. I don't see any of that sense of urgency. Yeah,

Eur- Europeans very much feeling like they're on the menu in this roast.

officials at the International Criminal Court in The Hague, some of them suddenly discovered that their Visa and Mastercard, their credit cards didn't work, nor did Booking.com, Amazon, or Airbnb.

And this was Trump's reaction to the ICC's arrest warrant for Israeli Prime Minister Benjamin Netanyahu over alleged war crimes in Gaza. So yeah, suddenly this wasn't just about a theoretical idea like cloud sovereignty, but it was a real issue. So Marietje, why did this story send such a chill through Europe?

I think it made it very tangible what lever the US government has on us Europeans. this notion of massive dependency, hundreds of billions spent on cloud risks making it so abstract and far removed from the individual that it's hard to imagine what that really means and why it's a worrisome thing.

But the ICC example really hit home in Europe, but especially in the Netherlands, maybe because the ICC sits in The Hague, and people were just like, "Wow, one, is Trump really doing this? And two, are these companies not able to push back or reject this somehow?" It was pretty clear that we shouldn't only think about the companies and big tech as a growing concern, which, I think has really landed in Europe, but also about the way in which the Trump administration sees tech companies as tools of power, geopolitics, imperialism even.

And so I think it made it very concrete what that means.

And you mentioned that you're affiliated with Stanford, Silicon Valley pretty well, but you're also a former member of the European Parliament, Brussels, and you wanted to bridge those worlds. But you've said that your own position has shifted, and that European digital sovereignty is now the most urgent task.

What was the tipping point moment when you realized that the bridge building isn't enough anymore?

I'm trying to think of the tipping point. I think we still need bridges, but Europe first and foremost needs to really start thinking and acting in its pure self-interest, and I think Europeans have not really learned and trained how to do that.

We like soft power. We like economic relations, fundamental rights, the single market, and so on. And where I've changed is that I'm just more and more aware of how naive that has been and how dangerous it is for not just defense, which has had, quite a bit of attention, but also for our democracy, for our self-determination as people, for our way of life, for the way in which we design our social contract, we access information, and for our security.

And so I would love to see Europe more self-confident the way that tech bros in California, can talk and think about themselves as being capable of doing anything, solving any problem. We are now in a very uncertain moment in Europe, and that needs to be overcome

Laurence, I wanna come to you to help us get a sense of when this tipping point occurred for others.

Our colleague Mathieu Peled argued in an article just before the Commission unveiled this package that Donald Trump may have done what years of speeches from Paris and Brussels couldn't, and that is to convince European leaders that tech dependence is a vulnerability. Can you remind us what that debate looked like before Trump?

I think what we've seen is that the discussion around Europe's tech sovereignty and essentially Europe's tech sector and how it can compete with other parts of the world, that isn't new. I remember going back 10 years, going back even longer than 10 years, the discussion in Brussels about should we have a European Google was very prominent, for instance.

Obviously, Europe never really found the solution to that question. I think what's changed now is it is that the world has changed around Europe, and so Europe is having to adapt to a new geopolitical reality. And so what we're increasingly realizing is that technology effectively is a strategic asset of governments, of powers in the world, and it is something that Europe needs to have power.

It is something that Europe needs to have healthy trade relations. And so that is prompting sort of this shift in Europe's thinking, and obviously the big driving force here is the return of Donald Trump to, to the White House. The incidents that we've seen in the transatlantic relationship since Donald Trump took office, it ranges from, sort of the US government railing against European tech regulation, but all the way to threatening annexation of Greenland.

You can really feel that like the, the antagonism, in the transatlantic relation that we've had in sort of the first year of the Trump administration has driven Brussels to really push it and come up with new solutions to essentially old problems, and that is what they're doing this week.

And Marietje, thinking of your book, The Tech Coup, it seems like it isn't necessarily just Trump.

You talked about these tech bros. You've warned that tech CEOs and billionaires are becoming political actors in their own right. So how do you see this deeper issue of the merging of big tech power and political power playing out here?

I think that has woken up Europeans, but still there's a reluctance to call a spade.

It has taken Europe way too long to appreciate the power dynamics that are at play that were already becoming a challenge when these big tech companies were taking decisions about infrastructure, about cybersecurity, about war and peace, about civil liberties, really core roles and matters that used to be the exclusive domain of states.

And so the wake-up call of that power came far too late. But when it merged Silicon Valley power with US state power in the form of Donald Trump, who indeed broke the West as we've known it, is very aggressive vis-à-vis the European Union. Trade wars, but also using AI and other technologies as an instrument of state power, asking for stakes in companies like the sell-off of TikTok, a stake in IBM, giving out executive orders that impact companies.

And yet, this narrative that Europe regulates, the US deregulates, is persistent. And so I think we're still seeing too slow of a response, too much of a spin from Silicon Valley as to what is going on, while indeed the double whammy for Europe between Silicon Valley abuse of power and Washington's abuse of power is a significant one.

And I can only hope that this is the last wake-up call we'll have.

I know that this idea that Brussels regulates and the US innovates is grating, and that there's eagerness here in the European capital to get beyond that, but the efforts to deregulate and free things up are really cast in the frame of competitiveness.

Marietje, what you're talking about is more really existential, and going over to Lawrence, from talking to commission officials, is this push still just really about, again, kind of the market or competitiveness, or do you feel like their tone is also changing?

The whole discussion around tech sovereignty kind of is both.

On the one hand, it is about the dependence that we have on the United States and on US technology, and so there's a lot of discussion, but at the same time, there is this question of can Europe actually have the economy that creates these kind of players? Can Europe create leaders and champions?

That is a question of competitiveness and whether Europe's regulatory framework plays against that. Obviously, we've heard from the commission, we've heard a very, very active narrative over the past year and a half that some of Europe's laws effectively hold European technology back. Right from the start when European Commission President Ursula von der Leyen came to office, she had the Draghi report to go off on, and Draghi singled out the AI Act and the general data protection regulation, the privacy law.

As problems.

As problems, as holding European business back. So I think it is both. It is the reliance on foreign technology, but it is also the question on whether our own regulatory framework has held us back from creating alternatives. And we're seeing that the solutions that Brussels comes up with, they somehow try to address both problems at once.

Lawrence, that's actually a perfect segue into talking about what the commission is actually proposing this week. So as to the package itself, we have the Cloud and AI Development Act, and part of that is about what governments need to take into consideration when they're choosing cloud providers for sensitive sectors like healthcare, defense, justice, energy.

Tell us more about what the commission wants to do here.

This is really one of the cornerstone proposals, if not the most central proposal. At the heart is the realization that US cloud providers account for over 70% of the market. there's rough estimations that 70% is taken up by the US three biggest cloud providers, so that's Amazon, Google, and Microsoft.

And European players only account for about 15% of the European market. Obviously, that's a big problem for Europe because cloud means data. It means having the in-house capabilities to run technology, including artificial intelligence. A lot of the technology sector hinges on cloud. So the commission wants governments to assess how reliant they are.

They want to look at their services and look at the cloud providers that they're using. How risky is this? How dangerous is this in terms of foreign intervention? And they're proposing sort of four levels of European tech sovereignty, that they want governments to assess their services against. And then from there, they're asking governments to, for some services, switch to higher levels of European tech sovereign services.

Another big element of their response in the cloud sector is that the commission itself wants to reserve the power to whitelist foreign countries, so effectively make its own assessments of whether US service providers are risky or are safe. That is a right that will be very controversial. It will lead to big discussions with the United States, big discussions with US cloud players, but also big discussions with national governments, because if there's one thing that national governments like to do, it's make decisions on their own, not having to delegate them to Brussels.

And so the caveat here is that what the commission presents this week, it's up for negotiation. It'll get watered down, and so the eventual outcome, might be very different from this. But essentially what Europe is looking for here is to create a shift in the cloud market whereby through its own public procurement, it is actually starting to boost its domestic alternatives, and therefore create European alternatives to the big US cloud providers.

Germany’s state of Schleswig-Holstein migrated 30,000 workstations away from Microsoft and recorded 15 million euros in licensing savings in 2026 alone.

Toulouse documented 1.8 million euros saved over three years by moving 90% of desktops to LibreOffice. Lyon’s model shows 1 million euros saved annually per 100,000 users. Italy’s Defense Ministry projected 29 million euros in savings from its own open source migration. Austria’s military completed a full exit from Microsoft Office across its entire armed forces.

The raw numbers tell a pretty clear story here. This is a coordinated, continent-wide cost extraction from a single US vendor. But the savings are actually the secondary story. The primary story is access, and here’s where it gets interesting. In 2025, Microsoft confirmed under oath that European data stored in EU data centers remained legally accessible to the US government under the CLOUD Act.

That was not a leaked memo. It was a sworn testimony. European governments then had to sit with the fact that their health records, defense communications, and tax infrastructure were all sitting on a platform that a foreign government could legally request access to. The software wasn’t just expensive, it was a sovereign liability.

Then Trump accelerated everything. When the administration sanctioned International Criminal Court judges, not states, not organizations, specific individual people, those individuals had their bank accounts closed and their access to US technology platforms terminated. Microsoft accounts gone, services gone.

That demonstration was, diplomatically speaking, very clarifying. European governments now had proof that access to US tech could be weaponized against individuals at will. France’s digital minister, David Amiel, didn’t dress it up. He said the goal is to regain control over digital destiny. French Minister Anne Le Hénanff went even further.

I’m quoting again, “Digital sovereignty is not an option. It is a strategic necessity.” That is not the language of IT procurement. That is the language of national security. If you want to understand the financial mechanisms, go look at what Microsoft has been doing with its pricing.

Microsoft specifically pushed 15% licensing hikes while simultaneously locking governments deeper into Azure. For public sector IT departments already under budget pressure, that combination, rising costs plus legal exposure, plus a US administration willing to use software access as a political weapon, made the switching cost calculation flip.

Staying became more expensive than leaving. The piece everyone misses in the pricing story is the compulsion layer. Microsoft's licensing model isn't just expensive, it is structured so that leaving gets harder the longer you stay. Every year of Azure integration, every SharePoint deployment, every Teams rollout adds another thread of dependency.

The exit cost compounds. That's not an accident, it is just their business model. What's changed now is that European governments have decided that sovereignty risk now outweighs the switching plan. And once that threshold gets crossed institutionally, the thread cutting tends to be thorough. They're not migrating the operating system and leaving everything else, they're pulling the whole thread.

This connects to a pattern I've covered before. If you haven't seen the video on Europe evicting US tech companies from military infrastructure, that's definitely worth watching. I'm going to link it. The logic is identical. The calculation isn't ideological, it is structural. The migration France is executing right now isn't a clean switch.

It covers operating systems, collaboration tools, health data platforms, antivirus, AI tools, virtualization, and network equipment, the full stack. France had already replaced Teams and Zoom with French-made Visio for two point five million civil servants and moved eighty thousand National Health Insurance Fund employees off Dropbox and Teams.

Linux is the operating system layer underneath all of it. And it's worth being precise about what the full stack actually means in practice because the scale tends to get lost in the headlines. Let's talk about that. France employs roughly five point five million public sector workers. Every device those workers use, every platform they collaborate on, every database their work touches, that is the surface area of this migration.

This isn't a pilot program in one agency. It is a mandate with a deadline covering the entire administrative infrastructure of the fifth largest economy in the world. A whole architecture is being rebuilt at national scale on a timeline. This is also why a separate initiative just emerged worth knowing about.

EuroOffice, a coalition of European tech companies, including Ionos and Nextcloud, announced a fully open source Microsoft format-compatible Office suite built and governed in Europe. We have a separate long video analysis on that one. The goal is seamless document compatibility with zero dependence on US platforms.

Think of it as the replacement part being manufactured while the old part is still being removed. The timing is not coincidental. And at the same time, Europe is running the same logic through its defense data layer. If you haven't seen the video on why Europe is ditching Palantir, that one connects directly to this.

Now, if you've been following along and want to sharpen how you analyze these patterns, how to spot when political language is masking financial restructuring, how to read what official announcements are actually saying under that rhetoric, I wrote a book exactly on that. It's called Awake: The Practice of Critical Thinking in an Age of Self-lies.

It's available as eBook and audiobook. Subscribers get 10% off, and you can grab the first chapter for free in the description links below. So here's what the pattern predicts next. The 18 to 24 months following a major government migration function as a reference window. If France's DINUM completes a successful Linux rollout, every other EU government's procurement conversation changes.

The enterprise sector then follows, banks, telecoms, energy infrastructure, all of which are watching this migration as a case study in operational viability. Red Hat, SUSE, Canonical, and European cloud providers OVHcloud and Scaleway are already reporting record client growth. The beneficiaries of this shift are European, open source, and not particularly interested in waiting for US policy to stabilize.

Microsoft's position in this is uncomfortable in a very specific way. France is a major public sector client, and the real risk for Microsoft isn't France alone, it's contagion. One successful migration removes the too risky to leave argument everywhere. Germany has already piloted, Italy is mid-migration, Denmark is committed.

The European Parliament voted in January to formally identify and eliminate EU reliance on foreign tech providers. This is now official EU policy, not a think tank recommendation. Anyone with proper training is going to spot the compounding dynamic here. Government contracts are Microsoft's anchor revenue.

They're long cycle, sticky, and they create a downstream effect where enterprises, contractors, and citizens who interface with government systems default to the same platforms. When government leaves, it doesn't just take its own devices, it takes the gravitational pull as well. The contractor ecosystem follows.

The civil service workforce retrained on Linux takes those skills into the private sector. The procurement templates get rewritten Microsoft’s lock-in relied on inertia, and inertia is precisely what this migration is designed to break. There’s also a timing problem for Microsoft that doesn’t get talked about enough, I think.

Windows 10 reached end of life in October 2025. That forced upgrade cycle, pay for new licenses or lose security support, landed right in the middle of Europe’s sovereignty conversation. Governments that were already uncomfortable suddenly had a bill in their inbox. For a lot of IT directors, that was the moment the switching cost calculation finally flipped.

Microsoft handed the migration advocates their best argument on a deadline with a price tag attached. Buried right there in the open data is a company watching its stickiest market, government, become unsticky all at once.

why do you think this ban happened? And do you agree with Andre that it's the US' prerogative to put an export ban on?

Yes, I agree. It's, completely rational, to keep technology to yourself if you have it.

for us, in Europe, this is not really a surprise, I would say. We have been expecting, something like this to happen for a long time. we have been, discussing that we need digital sovereignty. we need to be independent of, foreign, cloud services, foreign technology. We need to develop our own, and this i- this is exactly what Mistral is doing, what, other parties are doing, including ourselves.

we are part of a cooperation with, for instance, the French, Ministry of Culture, to develop, uh, measure- measuring devices and then also, feed into the development of language models.

So Rainie, you hear b- they're bo- b- both, Arvy and Andre saying that, it's the prerogative of the United States to, if it wants to, to-

You'll notice I didn't say the opposite.

Every- But you did shake your head. So why were you shaking your head?

Because I'm, as a cybersecurity professional, I'm sorry to pull rank on here. But it's just crazy to think that you'll go to a chatbot and s- tell it, "Oh, hackie chatbot, do hackie things," and it will all of a sudden own- out of its own volition, start finding things out of nowhere.

When you read Anthropic's own red team documentation, meaning the people who created and instrumented the pipeline that allegedly finds vulnerabilities, right? We have never used this. The only thing that we see is something that is mid-level marketing brochure, mid-level techno- techno speak, right? So when you read this, but this is the closest we get to the actual capacity, right?

So when you read this, what for this, this big, that was very popular in a few weeks again, ago, vulnerability, what is that this team that has been only doing this, spent 1,000 runs onto their own pipeline-

...

out of which came one vulnerability that they couldn't exploit, meaning they just found something that looks dangerous, but they couldn't make it do harm.

Okay.

So this- Brings a lot of questions. This brings questions about posture, marketing. "Oh, my AI is so dangerous. If I publish it, we all die." Excuse me, but OpenAI did this in 20-

So that's why Yann LeCun, that post, was angry.

Yes, and I agree with him. This is we all jumping right into that sort of marketing propaganda, and I'm sorry, but this is below us.

This is beneath us. So this is one thing. Second thing is that when you see how Project Glasswing works, meaning the whole framework where business partnerships are done around the whole Mythos thing, model- This is

Anthropic's,

big model there. So the Project Glasswing thing is all service providers of different cybersecurity needs around vulnerability management.

So there you get a very nice vertical business model where the model allegedly finds vulnerabilities. It doesn't ask anything about the whole ecosystem of vulnerability management, which is a frigging, excuse my French, wicked problem From a operational point of view. But it comes with a set, a closed set of business service providers that will help you handle the problem that they allegedly create.

And all this never asks the question about how much it costs to find those vulnerabilities. So the thousand runs that the Mythos pipeline allegedly did to find this vulnerability costs 20,000 in tokens only, US dollars.

so they're-

Right? So- They're,

they're, they're- I apologize ... they're hooking you into a system where they keep you coming, and where it's hard to disengage afterwards.

Yeah, and even further than that, and I will be giving you ... But even further than that, how many companies do you know that could just, like this, spend 20,000 on tokens and hope for the best that they will find something that is actually useful for them?

All right, so I have a lot of questions for Bernard Benhamou- because the last time you joined us, we picked up on, reporting that France's domestic intelligence service, its equivalent of the FBI or MI5, was beholden to Palantir, uh, for its surveillance system. That's a US company. the prime minister, the French Prime Minister Tuesday announcing it was breaking the contract and turning it over to French company ChapsVision.

I hope I'm pronouncing that, Yeah ... cr- correctly. Bernard Benhamou, first question. Everyone said, "Oh, you ... The DGSI, the, the domestic intelligence, it can't break the contract because they've been in bed with them since 2016. Those contracts are hard to break." Now they can break the contract?

that's not what Palantir is saying, obviously.

They are saying that it will go to its, natural expiration date, which is 2028. So basically, let me say it bluntly. That's good news. Good news that- But

is the prime minister embellishing when he says, "We're gonna s-

no. We have

to- He's talking about breaking the contract, not, not-

he told that-

getting

a new tender when it lapses ... but even

DGSI was saying that they will need time-

Okay ...

to adjust to the new system. in fact, we have to remember the chronology about that. A few weeks ago, the Germans' service were using ChapsVision instead of Palantir. So in a way, for France n- and France DGSI, not using a French tool when the German are using it is something politically difficult.

And from what I heard from insiders, it's obvious that if the German didn't announce that they were using a French company, Palantir would still be in use at this time. So in a way, it was a political decision. I'm sorry to talk about politics, but sometimes it's necessary, and it's a good one because we've been dependent, relying on that solution for 10 years.

If it was- At some point, at the very beginning, useful for just after the, the bombings and the, That's correct ... assassinations, spree in 2015. Indeed, now, 10 years later, not having a European company dealing with those issues was simply politically impossible to justify. So at this moment, in terms of digital sovereignty, after another affair happened a few weeks before where the health data s- platform, the health data hub was, removed from Microsoft Azure cloud service to a French company, Scaleway.

This was also a trend which shows one thing, that digital sovereignty is an issue that no one, i- including high-level politicians, are able to dismiss. And if I may, just one thing. On this Anthropic issue, for the first time ever since we've been dealing with those issue for more than 10 years at the institute, we saw first-level candidates for the presidential election saying that we need to develop our own digital sovereignty.

And Finally, Section D, Building European Alternatives

a bit of background on Europe's tech sector, which has long lagged behind America's. Since the emergence of the internet in the 1990s, the US has held a dominant position in the global digital economy, producing tech giants including Apple, Google, Microsoft, and NVIDIA.

In fact, US chipmaker NVIDIA, now the world's biggest company and the first to be valued at over $5 trillion, is bigger than Europe's 20 largest companies combined. Today, Europe is home to just 12 of the world's 100 most valuable tech companies, compared to 56 in America and 16 in China. In fact, less than a fifth of the world's most valuable tech companies are located in the EU.

This is largely because of difficulties in scaling across the EU's diverse national markets, less venture capital and more cautious investments in Europe compared to the US, and less R&D, research and development funding for startups. Specifically, at the moment, the EU represents just 7% of global R&D spending in software and internet technologies, compared to 71% by US firms and 15% by Chinese firms.

This is largely why, as recommended by the highly influential 2024 Draghi report on the future of European competitiveness, European policymakers have begun taking steps to mobilize capital and harmonize the EU's internal market. For example, the so-called E6 of Germany, France, Italy, Spain, the Netherlands, and Poland are now pushing to advance plans for a capital markets union, which would create a single market for capital, a plan that should help fast-growing European startups scale quicker.

However, even if Europe's tech economy remains a long way behind America's, it has seen significant growth over the past decade. Last week, Dan O'Brien, chief economist at the Institute of International Economics, described the 60% growth in European tech employment over the past decade as one of the most important stats which anyone remotely interested in economics should be aware of.

Moreover, a number of promising digital startups such as Vinted, the Lithuanian secondhand clothes marketplace; Octopus Energy, the British cloud-based energy platform; and the German drone manufacturer Helsing have all emerged in the past decade. Essentially, tech is the defining feature of modern service-based economies, and Europe's growing tech sector is carving out new and highly competitive niches.

As such, there are rising calls for the EU to do more to encourage AI adoption, improve digital infrastructure, or increase R&D spending to its target of 3% of GDP in order to help new digital companies grow and scale. Essentially, as we see it, there are three things behind Europe's quiet tech boom. First, a rise in capital funding inside Europe.

Second, increasing digitization. And third, the recent impact of US President Donald Trump. The first thing behind Europe's growth in tech is an increase in venture capital, or VC funding. Historically, capital funding in the US has been far deeper and less risk-averse than in Europe, with many of the big US tech companies, including Uber previously and OpenAI currently, operating at multi-billion dollar losses before becoming profitable.

However, in the decade between 2015 and 2025, VC investment in European startups nearly quadrupled from $22 billion to $85 billion. Still a long way off the US, but around 30 billion more than China. Alongside this, investment from European pension funds has increased. And according to Sifted, European VC has outperformed US funds over the past 10 and 15 years, with 42% of entrepreneurs, according to the trade association Invest Europe, saying it's more attractive to be a founder in Europe today than a year ago.

Alongside that, in December, the European Commission published its new plan to unify Europe's segmented capital markets, which should help startups raise money. While this won't be easy, as it will involve efforts to harmonize tax regimes between different EU member states, it's probably necessary if the EU wants to remain competitive.

Several governments, including in the UK, France, and Germany, are also trying to encourage pension funds to invest more in risky assets such as newly founded tech firms. And the UK government has also recently launched its Savvy Squirrel ads aimed at encouraging cautious British savers to start investing, potentially increasing the overall supply of investment capital in the economy.

The second reason for Europe's quiet tech boom is increased digitization. Countries like Estonia, which produced Bolt, Europe's answer to Uber, and Sweden, which produced Spotify and Klarna, have combined high quality digital infrastructure, strong technical education, and early adoption of digital tools like AI to help lower the cost of starting new tech firms.

Meanwhile, the German government has created a new digital ministry to accelerate digital infrastructure, and the UK is also trying to digitize in healthcare, the justice system, and public sector. The third and final reason for Europe's quiet tech boom is, you guessed it, Trump. For decades, the US, especially Silicon Valley, has been a receptacle for global tech talent, attracting researchers, engineers, and founders from around the world.

But since 2023, according to analysis by Revelio Labs, transatlantic tech migration has slowed, and the balance of movement has actually shifted towards Europe. This is partly thanks to growing tech hubs in European cities like London, Paris, and Stockholm, but also due to the impact of Trump's visa restrictions and immigration crackdown.

Of course, it's not certain that this tilt towards Europe will last beyond Trump, but he does seem to have gifted Europe a once-in-a-generation opportunity to achieve true digital sovereignty, and Europe is clearly seizing the moment.

This is Station F. I am in Paris today, and this is one of the biggest startup campuses on Earth. Sitting in the middle of Paris. Literally, there's construction going on behind me, so I hope they're not too loud. Although... And I'm gonna walk with you into this building that is Station F. Because a few weeks ago, I was in Silicon Valley, as you can see from my videos that I shot over there, and there I thought, "Okay, how can Europe compete with this incredible ecosystem that they have in the Bay Area?"

And I've come to Paris, and I will go to other European cities to find out, because this place absolutely insists that Europe can keep up, and I'm giving them a shot.

So you're a startup founder. What are you building?

we're building software for factories, so manufacturing, heavy industry. We help them with documentation, and we understand and build a map of how the factory works and looks, with the goal of surfacing improvements and optimizations, and finally integrating robotics, into the factory.

You've been at Station F for a few months. Can you explain to the viewers, like how does it work? What are the things you have to do to get here?

Sure. You have a bunch of programs that's offered by Station F. The most common one is called the Landing Zone, which is like the staging area where you come in, you can start working, and they start looking for programs that you wanna be a part of.

That's what we're doing right now. I think you can be in the Landing Zone for two years or so, or something like this, and then you kinda have to find partner programs that you wanna join. Yeah.

And does Station F charge you for that, or how-

They do. They do. Okay.

So-

it's like a coworking space at the end of the day- Okay, cool

so you have to pay for a desk. So

the

programs that you then apply from the Landing Zone, they are ... They come with funding?

Depends on the program. So some programs, they're basically sponsored by companies and organizations that wanna have a space at Station F. some of them pay for your desk. Some of them invest.

we went through Entrepreneurs First. We used to be in Station F. They invest in the company as well. so it really depends on the program. '

Cause I saw a lot of logos around. Yeah. OpenAI, Google, Amazon. They get a space here, and gives them access or ...?

I guess those companies just have a space in the Share Zone, and they're basically like, if you have questions for OpenAI, you go there.

But then there are other companies in the Create Zone. For example, like Universal's there, Essec, or HTC. They have stuff. L'Oréal has a space where you can be part of L'Oréal's space and then- LVMH has-

LVMH

as well. Yeah. Yeah.

This building is actually so impressive. It's this huge hall that is actually a transformed railway building where they were storing railways before. And now, thanks to gentrification, it's all been transformed. And this place is actually so impressive because it doesn't run like a traditional accelerator or a traditional incubator.

It actually has these very big partnerships with established, bigger companies that were startups once or brick-and-mortar businesses, and they fund a lot of the programs here. So you apply to some of the landing program or the founder's program, which is, your way into this. And then you can apply from here in terms of the first programs that you get in when you come here.

So Station F acts more like a co-working space for the companies who come in for the first time. But then you have these partnerships with the bigger players. So you see here Google for Startups, OpenAI. I saw Snowflake is over there. Then up here you have a bunch of VCs. Obviously, VCs also pay to be part of this space.

Then you have here some of the alumni, actually, of Station F. Mistral AI, which was founded here originally. OpenAI, of course. And then these companies all gain access to the startups who are here. And you have 1,000 startups. This is just one hall. You have three halls, actually, the last one being the food and beverage hall that is also open to the public.

So I'm gonna walk through these spaces, and I'm gonna show you a little bit behind the scenes. And in a bit, we will meet with Assya, who's a connection I know here, and we're gonna get a, a sneak peek, a little tour of what this space is all about, and I'll ask her a few questions as well.

interesting innovation I've just come across. I have spotted this machine here that is creating water from air. And I just refilled my water bottle here, so I'm gonna try it out. So this water, obviously we're in Europe, so you get these lovely caps here. But this water I just refilled from this machine purely created from air.

Normal water.

Okay, so very different atmosphere up here. you have some meeting boxes. These boxes actually have a nice view of the space below, and I can see teams working here tirelessly, some of them on calls, some of them live coding. A lot happening, and a lot of branded stuff. So you have Databricks here again, and you can see some things going on, meetings or things happening.

So now I am in the second building. I went up a floor, and this is more packed actually, both with people and also with infrastructure. You have different teams working here in open spaces. Then you have these breakout spaces where you can go down there. Interesting to see. Also, you can see the HEC campus spot here, and, lots of other branded features.

Meta's on the other side there, and then a lot of these French startups incubating out of here, using this as a coworking space, a launchpad, and place to network and meet people. So now I'm heading over to the front desk again to meet Assya.

Assya.

Hi.

So I just finished my tour with Asia. Unfortunately, they have comms guidelines that they cannot be spontaneously interviewed by YouTubers like me, which is understandable, but I'm going to try and relate what she told me. So effectively, as I said, there are three buildings. The first one, the second one, the third one.

The first one is the open one for events. They have actually a whole theater below us here. So down here there's a whole theater that is stage and a whole setup. This is what it looks like when they're transforming the space into an event space. I'm not exactly sure what they're doing here right now, but there's definitely- A lot of change is happening.

It's probably to do with VivaTech that is happening this week. Maybe also something regarding the World Cup. I don't know. But that's how they transform the space on a regular basis to host all kinds of events. Then in the second building, that's where all the programs are running. I'm actually not allowed to film there, so might have to cut some scenes from there.

Let's see if there's anything sensitive in there, but I don't think so. So the second scene, we're not gonna go and vlog there now. So the second building is where all the programs sit. So you have programs that are managed by Station F themselves, so that's the landing zone and the founders program, and then you have the sponsored programs that are being run by big companies and corporates like LVMH, L'Oréal, but also companies like Roche in the health space or Microsoft for their cloud space.

And all of these programs are built in a way that they are not overlapping, so every program is unique in its own way, and that's how they make sure that there's a good ecosystem and as much as possible is covered. What she did mention to me as well was that there is no robotics cluster right now, so they're trying to build that up.

So that is something that will be interesting to watch in the future. And then in the third building is where they have the restaurant, and that's where they serve all kinds of food. You actually have to buy the food that you want through your phone, through a QR code. It's more like ordering delivery and then picking it up.

That's a modern way they've managed to implement here, which is very futuristic, Another interesting point that she mentioned is that there is this cooperation with La French Tech, and they have the sticker behind me here, logo right here, and they are actually the government incubator or backer of innovation and technology, and they are very proud here at Station F, I think rightly that they have been able to...

Even though this is a private campus and a private enterprise that actually is a for-profit company, they don't actually make a profit in the end because they always reinvest everything back into the infrastructure. But it is a private company, and they're very proud to have this government-backed entity also as one of their tenants here.

They're actually renting office space, not funding them with grants or similar things like that. But they are part of the space, and they're able to help founders when it's about anything relating to government issues like founding companies, but also visas and all kinds of things that relate to government work.

​

basically, my entire digital life runs on an US ecosystem, and to be honest, yours probably does too. But to be fair, there actually is a movement in Europe right now to try and change all of this. And let's start with this app right here, WhatsApp. It's literally my go-to for talking to basically everyone, my friends, family, and even work colleagues.

But governments across Europe are starting to move away from it. Countries like France, Germany, Poland, the Netherlands, Luxembourg, and Belgium are rolling out their very own messaging systems for officials, especially when it comes to sensitive communication. And one great example here is France, which is pushing its own secure messaging app, Olvid, which is now being used for government communication.

NATO is another good one. their information or their messages are, of course, super confidential, and they have a fully internal messaging system. And at the EU level, the European Commission has stated that it's moving towards a replacement of WhatsApp too, likely going for a mix of secure tools depending, of course, how sensitive the communication actually is.

And in some cases, it goes further than just messaging. And we have to look at France again here, who really does value independence and is now trying to move away from Windows in its public sector to Linux-based systems. Quite a, drastic move. But at this point, we do really have to be real for a second and actually look at how big US influence is when it comes to messaging apps and social media because we cannot sugarcoat it.

It is so big. Take WhatsApp. It has around two point nine billion monthly users. That's more than a third of the entire global population using it every single month. And the crazy part is it's not even the biggest app out there. That title still goes to no other than Mark Zuckerberg for his original app, Facebook, with around three point one billion users.

That's roughly thirty-seven percent of the world logging on to the same platform every month, which, yeah, is just insane. Then in third place, you have this very platform that you're on right now, YouTube, with around two point seven billion users. After that, you get platforms like Instagram, TikTok, and WeChat, and then the slightly smaller ones like Messenger, Telegram, LinkedIn, and Snapchat.

And this is where it gets interesting because if you look at all of these major platforms, seven are American. Two are Chinese, and one is technically based in the UAE, Telegram. But even that one isn't really Emirati. It was founded by Russian entrepreneurs, and its roots are much closer to Russia than the UAE.

And if we zoom out and look at the big picture, the global social media landscape is basically dominated by just two countries, the United States and China. And yeah, if we talk about Europe, not one social media app is in the top 30. just think about that. A continent with over 700 million people who use social media every day, and not one single app is European here in Europe.

It's a very sad story But at EM It's Simple, we do want to stay positive because it's not like these apps don't exist. There are actually European alternatives for almost everything we use. Instead of Facebook, there's Mastodon from Germany. And instead of WhatsApp, there's Threema from Switzerland, or Element from the UK, or Olvid from France.

Or instead of YouTube, where you're on right now, there's Dailymotion or Peertube, both from France. And there's many more. So the apps are there. But if, once again, we are very honest with ourselves, how many of these apps do you actually have on your home screen on your phone right now? Because when I look at the numbers, definitely not many of you.

And I do get it, because if you look at Dailymotion, it doesn't have the same user experience, and it feels a little bit buggy when using it. Now, to be fair, when we look at Instagram alternatives, there is actually some hope right here in Europe, and it comes out of Paris and Luxembourg. First, there's BeReal, and a colleague that I work with in the office was super disappointed when I told them I had no idea what this app was about.

So in case you're like me and you haven't used it, once a day, you get a notification at the same time to snap a photo of whatever you're doing, without filters, without staging. Basically just real life. And it's now hit over 40 million monthly active users. And while that's a drop in the ocean compared to Instagram's billions, it is proof that a French startup can actually export a new way of socializing to basically the whole rest of the world.

But that's not the only example. If you want something more classic, like a photo-sharing space without the addiction algorithms, you could potentially look at Monét. And we actually spoke with their CEO, Christos Floros, about what makes Monét different from other social media apps out there.

We are removing the algorithm by design, and we are pro-democracy and pro-social by design.

In essence, we're saying people should see chronologically what is being shared, and there shouldn't be an algorithm manipulating public opinion and what gets put front and center.

It's honestly quite a cool app, and it's getting better with each version. And here at EU Made Simple, we started using it.

But let's now get to the core of it. Why is any of this actually important? First, obviously, there's the economy. Having these massive tech companies born and raised in Europe creates jobs, sparks innovation, and is truly a way we can get competitive again. But it's also much, much more than that. It's also about European sovereignty.

Social media are very powerful tools for societies to communicate, and we shouldn't be outsourcing the responsibility of where dialogue happens to private entities outside, our immediate sphere of influence. This is hugely geopolitical. Last year, we found out that, Benjamin Netanyahu described social media as the most powerful weapon, and the guy literally have, has access to nuclear weapons.

So sh- we should consider that. Regardless of his politics, I think he's right about that, right? and Donald Trump, regardless of his politics, was not an idiot to say, "TikTok will not operate in my country, with a foreign country having influence over the algorithm." So Europe definitely needs to treat social networks as civic infrastructure, and urgently

And there's a deeper layer to this, too.

Our European data. Under the U.S. CLOUD Act, the American government can compel U.S. companies to hand over data even if the service are physically sitting right here in Europe. And in China, let's not even talk about that. The laws are even more direct. And when the state holds the keys to the data of 450 million Europeans, they don't just have our photos.

They have our very blueprint of our society. They know our trends, our weaknesses, and all of our political leanings. That is an unbelievable amount of leverage to give away for free. So it is critical that we get our startups off the ground and scale them to match the giants in the U.S. The question is, how?

One has to do with money to burn to be able to acquire people on the platform, so marketing, go-to-market, capital. TikTok invested over one billion euro per geography to acquire, users. So but also just great products and, great products that can support network effects because we are in the network effect business.

We are in the social network business. a- and that requires great products, so that's why also, made in Europe alone is not gonna win. We need to create the best possible experience

We probably ought to start by explaining who the public service broadcasters, or PSBs, actually are. The one you're probably most familiar with is the BBC. They're a state-owned broadcasting corporation primarily funded by the UK's license fee, with the remaining chunk coming from commercial activities and government grants.

Then there's Channel 4. They're also state-owned, but unlike the BBC, Channel 4 doesn't receive any of the license fee. Instead, they're funded by advertising. Despite having to fund themselves, the fact they're owned by the state means that they still operate under a tight mandate to champion diversity, alternative viewpoints, and independent production.

Next are ITV, STV in Scotland, and Channel 5. Unlike the BBC, they're commercial companies and are funded by advertising. However, they are still PSBs, as they hold deals with the state in exchange for the right to broadcast on channels three and five. In exchange for these prominent placements on your TV remote and at the top of the TV guide, both are obligated to broadcast a set amount of impartial, high-quality news each year; produce a large proportion of their shows in the UK rather than just importing them; produce content across the UK rather than just in London, with ITV also required to offer regional programming; as well as other obligations when it comes to accessibility and subtitling.

Finally, there's S4C, the Welsh-language broadcaster, who receive a small proportion of the license fee and are obliged to offer similar public service broadcasting in Welsh. Essentially, though, regardless of their ownership or funding models, each of these broadcasters has done a deal with the UK government.

They get to benefit from being the first things when you turn on your TV or open your TV guide, as well as getting huge discounts on TV spectrum. In return, they're obligated to provide some sort of public good. The issue is, though, fewer people are consuming linear TV than ever before. Instead of flicking onto regular TV, people are just as likely to head to a streaming service like Netflix, Disney Plus, or crucially, YouTube.

With YouTube equal to the BBC as the top-ranking video content platform by watch time in the UK. And here's where we circle back to where we started. When you open up YouTube, you're presented with a feed of videos that the platform thinks you'll like. Some of these might be from public service broadcasters.

Some of them will be from big media companies. And some of them will be from creators like us. That means that on the platforms people are increasingly using, the PSBs no longer get the priority that they've grown so used to. So here comes the green paper, and with it, the issue of prominence. Essentially, the PSBs feel that they're no longer getting a great deal.

With prominent placement on TVs decreasingly relevant, PSBs are beginning to wonder why they still have to continue committing to everything in their mandates if they're not also getting extra prominence on other online video platforms, too. As such, the green paper proposes a new regulatory structure whereby platforms like YouTube are forced to give special prominence to videos produced by PSBs in exchange for the public service benefits they already offer.

The green paper does suggest that deals between PSBs and YouTube could be reached via voluntary agreements, but explicitly warns that if these agreements don't go far enough, then the government could introduce formal legislation. They also discuss expanding the scope even beyond PSBs, potentially also looping in other UK-based media outlets, such as national or local newspapers.

Now, the government's green paper claims that they don't see this as a zero-sum game between broadcasters and creators. But while this might sound good, I just don't see how it can be true. If your homepage is filled with content from PSBs, definitionally, it can't feature as much content from other creators.

And ultimately, if you're presented with a homepage full of loads of PSB videos about, say, Starmer's resignation, for instance, you're likely to watch them, right? That's why the government is doing this. They too believe that by surfacing these videos more prominently, you're more likely to watch them.

Otherwise, this whole debate about prominence is pointless. The problem for us is that our videos, as well as other creator videos, won't appear in this promotional push, and once you've watched Channel 4's video about Starmer's resignation, how likely are you to hunt down ours too? Even if you prefer our videos, which looking at these view counts seems pretty likely, it's very possible that you will just have their video surfaced instead.

And as such, the plans might make the PSBs happy, but frankly, it crushes independent creators like us, which really does matter considering that YouTube already contributes more than 2.2 billion pounds to the UK economy each year. In fact, even the All Party Parliamentary Group for Digital Creators recognizes this, with MP and co-chair of the APPG Feryal Clark saying in a recent report, "Bluntly, if we're serious about growth, we need to support digital creators and help their businesses to thrive rather than hamper them by a lack of recognition and support."

These proposals are also likely to lead to a worse experience for you, too. If you really wanted to watch the content that the BBC or ITV were creating, you'd probably already be on iPlayer or ITVX watching their programming. In fact, at the risk of just coming for the BBC directly, if you look at their viewership across their main news channel versus any of our channels, you can see that people are just far less likely to want to consume any one BBC video versus any one of ours.

That's not because viewers haven't had the opportunity to discover the BBC and find out about the news they make. We all know about the BBC. It's because the audience is expressing a preference for one kind of content over another. There are also critics who worry about the potential censorship effect that decisions like this could have.

Effectively, this could allow the government to intermediate these relationships and decide which news sources are sufficiently authoritative before forcing platforms to amplify them. This isn't to say that YouTube is perfect or that every creator on YouTube is perfect, but this proposal risks fundamentally undermining the ability of channels like ours to inform our audiences.

If you, like us, feel that the current proposals are unfair to UK creators and want to have your say, then the government's currently running a public consultation right now, with it set to close at the end of August. So if you'd like to have your say, then now is the time,

That's going to be it for today.

As always, keep the comments coming in.

You can record - and re-record - a voice message by tapping the link in the show notes,

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The additional sections of the show included clips from;

DW News

BBC News

TLDR News EU

Max Fisher

POLITICO Europe

FRANCE 24 English

House of El

Johannes Gemmingen

EU Made Simple

and TLDR News

Further details are in the show notes.

Thanks to everyone for listening, thanks to Deon and Erin for their production work for the show, thanks to Amanda for all of her work behind the scenes, thanks to our editors and thanks to those who already support the show by becoming a member, purchasing gift memberships, or making one-time donations.

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So coming to you from far outside the conventional wisdom of Washington, DC, my name is Jay! And this has been the Best of the Left podcast, coming to you twice weekly, thanks entirely to the members and donors to the show, from bestoftheleft.com.