Better in their words…

Wolfgang Munchau

UNHERD. MAR 23 2026 – 12:03AM 5 MINS

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One of the clearest, simplest explanations of why the EU is where the EU is. mrossol

“The dollar is our currency, but it’s your problem,” John Connally, Nixon’s treasury secretary, once told the Europeans. That was back in 1971, and the quip is a good reminder that Europe’s dependency on the US goes back a long time. Back then, the dollar-centric global monetary system was collapsing, leaving the Europeans exposed to a degree of exchange-rate volatility they hadn’t experienced before.  So when Europeans say today that “this is not our war”, Donald Trump might well respond: “It is my war, but your problem.” Europe has become a weak US dependency in every dimension: its military, its financial system, and its technology.

Nobody in the world is completely independent, but many countries are more robust than we are. Russia has proven resilient, shaking off Western sanctions, which should come as no surprise to anyone who knows the country. China, too, is clearly resilient. And the US is more than resilient. It is a country that thrives under adversity, very much in accordance with Nassim Nicholas Taleb’s notion of “Antifragility”.  Modern Europe, however, is most certainly not antifragile. With every shock, it weakens. After the Covid pandemic, the US reconnected with its pre-pandemic growth trajectory. The Europeans, mostly, did not. Our GDP settled at a level below its previous trajectory — growing at an increasingly lower rate.

It is now happening again. Only three weeks into the US-Iran war, European interest rates have risen and there are reports of gas shortages. Why are the European gas tanks almost empty? Why have the Europeans not built a large strategic oil reserve, like the US and China, or gas reserves lasting for several years?

The very essence of dependency is when you let others do your strategic thinking. In Niall Ferguson’s biography of Kissinger, the ex-secretary of state is quoted as saying back in 1966 that “the present system encourages too many of our allies to shift the costs and the responsibilities of the common defense to us”. This has been a theme in transatlantic relations ever since, as Europe’s culture of dependency expanded into other areas, including technology. It’s like a drug addiction that started out casual and harmless but eventually became destructive.

The problem with political addictions, especially those that have been allowed to fester for decades, is that they become hard to reverse.  For example, Germany made itself dependent on Russia for its gas supplies for the two decades until Russia invaded Ukraine in 2022. It took a war to end it. At that point, the Germans switched towards gas from the US and Qatar and replaced one dependency with another. They are dependent on gas because they persisted in killing the only two energy sources they had: coal and nuclear. Yes, there is clearly a good environmental reason to phase out coal, but this wasn’t the right time. To end both coal and nuclear together, and to do so simultaneously, is hopping mad. Nobody understood nuclear engineering better than the Germans; they gave up on an important energy source, as well as a technology.

If you prioritize strategic independence, the right policy mix for European countries would be the kitchen-sink approach and do everything: nuclear, renewables, gas, and coal. If one goes, you still have the others. The idea that Europe, which is one of the least resource-rich places on earth, has a choice in this matter is delusional. The Europeans Greens were right about renewables, but they messed up by turning it into an ideological debate. So did the parties on the Right, who were anti-renewables. I think this is just as stupid.

Europe hasn’t just sacrificed its energy independence, but its military independence too. Our European armies are in a dreadful state. The decay cannot be adequately measured in terms of military spending as a proportion of GDP. The metric vastly understates the true extent of the dilapidated state of our armed forces. General Sir Richard Barrons, a former commander of Britain’s Joint Forces Command, said that the British Army, were it to act alone, “could seize one small market town on a good day”. I have heard similar comments from German Bundeswehr generals. They all agree they couldn’t fight Russia. When Europe spends on average 2% of its GDP on defense, and the US spends 3.5%, this does not even begin to tell you what’s really going on. If you measure it in terms of what security the money has bought, the gap is much bigger than the one between those two headline numbers.

Because of this, we cannot supply more weapons to Ukraine. We don’t have any left that we can discard without endangering our own security even further. Europe’s armed forces also fail to attract the right people. I know of someone who was rejected by the German army over a decade ago on the grounds that he was overqualified. Back then, the German army was a welfare program for unemployed young men. This was when Ursula von der Leyen was Germany’s defense minister. Today she is President of the European Commission,

The reason why we Europeans hyperventilate so much about Donald Trump is that he threatens our dependence on America like no one else has ever done. He threatened to pull out of Nato unless we spend more money on defense. And now one of the many unintended consequences of his war against Iran, which is a big political and military miscalculation, is that it exposes the weaknesses of our energy policies. It really is his war, and our problem.

“It really is his war, and our problem.” 

If we have to pay for our own defense, our own energy security, and for Ukraine, out of our own pocket, then the math is quite simple: we can no longer afford cradle-to-grave welfare systems. We Europeans arrogantly look down on Americans because the US has food stamps where we have guaranteed citizens’ incomes. We Europeans lived in a delirious state, one in which we mistook our own pathetic dependence for cultural superiority. Once you are at such an advanced stage of delusion, it is going to be very difficult to reconnect back to reality. I don’t see any political party, in any European country, on the Left, the Right, or in the center, that has a concrete strategy for an independent Europe. All that is on offer is different forms of dependency.

This leads naturally to the question of what to expect going forward. Until about a decade ago, I was moderately optimistic that the EU, or rather the eurozone, could emerge as a vehicle for geopolitical power and independence. If the euro had been fortified by a capital markets union, and a sovereign debt instrument, the EU would have acquired an instrument of geopolitical force, very much in the way the US is exploiting the dollar, and its dominance of the global financial market, as a tool for geopolitical sanctions.

The eurozone crisis was the moment when it became clear that the EU would not go down in this direction. It was a decision of historical importance. The opportunity came, and it went. The EU chose the soft option, a central bank bailout that transformed an acute crisis into the low-burner, long-term decay the EU finds itself in today.

The most probable way for change to occur is through an existential crisis, brought about by one of the four horsemen of the apocalypse: war, pestilence, famine or death. We had a pandemic. Then a war. Then another war. Fertilizer shortages might  lead to a famine. The global financial crisis was an important historical event, but it was not the big one. There is no preordained timeline to any of this. The state of delirium can easily outlast all of us. But however long it persists, it is unsustainable. This won’t go on — not because it shouldn’t, but because it can’t. A dependency is only ever sustainable if the side you depend on plays along. Trump has broken that link. I think it’s unlikely that even a Democratic successor would reestablish it. You can no longer be a drug addict when the supply runs out.

The real irony here is that we Europeans used to be the ones that others were dependent on. But no more.  Connally’s famous quip about the dollar being the US currency and Europe’s problem had a European precursor: the Austrian diplomat Klemens von Metternich. He once said of France, the dominant continental power in the 18th and 19th centuries, that “when France sneezes, the rest of Europe catches a cold”. Today, it’s America that’s sneezing — and Europe can’t shake its cold.

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Wolfgang Munchau is the Director of Eurointelligence and an UnHerd columnist.