

Economic Consequences of Europe’s New Geopolitical Situation, with Moritz Schularick
Feb 21, 2025
Moritz Schularick, President of the Kiel Institute for the World Economy and a leading expert on geopolitical and economic research, joins the discussion on Europe’s changing landscape. He addresses the economic fallout from Russia's imperialistic actions and the uncertainty of U.S. commitments. The conversation delves into the necessity of a unified European defense strategy and the implications of increased defense spending on technology and productivity. Schularick highlights the adaptation of military innovations for civilian use, emphasizing a future of strategic economic responses.
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Erosion of Global Order
- The global order, once backed by the U.S., is eroding due to the West's declining economic weight and China's rise.
- This shift has triggered a backlash against the established order, particularly as China hasn't democratized as expected.
EU's Strengths and Weaknesses
- The European Union's centralized trade policy is advantageous, giving it strength in negotiations with large powers.
- However, its fragmented security and defense setup makes it a less effective geopolitical player.
European Defense Union
- Europe must unite to form a credible defense union, pooling resources for greater strength and reduced reliance on the U.S..
- Prioritize speed and efficacy over bureaucratic efficiency, potentially leapfrogging a generation of defense technology.