Europe's new balancing act: Searching for stability in an unstable world

EU chief says its economies must be able to absorb shocks by anticipating developments

- Markus Ziener

guarantees of open trade, cheap energy and US security have eroded, leaving the continent to find its own equilibrium in a time of deep uncertainty.

Whether it is disrupted semiconductor supplies, erratic acts of a US administration or a runaway European regulatory machine, the question now confronting policymakers and executives is how to build stability when predictability itself has vanished.

At a recent conference in Berlin, discussions made clear the European Union must move faster, particularly in four areas: industrial policy, capital markets, defence procurement and regulation.

Instead of pursuing competing national strategies, Europe needs shared priorities and joint investments in critical sectors such as semiconductors, artificial intelligence and energy.

Doing so would not only foster growth but also strengthen Europe’s strategic autonomy and reduce dependence on other global markets.

This was underscored in a speech by Dr Ursula von der Leyen, president of the European Commission, when she spoke at the Oct 23-25 Berlin Global Dialogue (BGD) conference, which brought together leaders in politics, corporations and finance from around the world. The theme for 2025 was “shifting power, shaping prosperity”.

“We are now in an era of geoeconomics,” she said, warning that “business as usual is no longer an option”.

Europe, she argued, must “make sure that our economies can adapt and absorb shocks” by anticipating developments rather than reacting to them. That included working on a Made in Europe strategy and rethinking Europe’s industrial policy.

The goal is to de-risk sensitive areas and make the continent more independent, she said.

She pointed to China’s tightening of export controls on rare earths as a major concern. “These actions pose a significant risk and will significantly hamper other countries in developing a rare earth industry,” she said. “It will have a huge impact on our industries.”