Science and Eurobonds: Europe's opportunity

Europe may be one of the most harmed by the decisions made by the current US administration: in trade, through tariffs; in security, through collusion with Russia; and in politics, through support for the European far right. The history of the Old Continent has not exactly been peaceful, but the end of World War II and the Cold War consolidated the peace, which was first shattered at the end of the 20th century by the Balkan Wars and recently by the invasion of Ukraine. The end of the alliance with the US presents a great challenge but also a great opportunity: to take a step forward in European unity in politics, security, economics, and science.

The war in Ukraine and doubts about the permanence and effectiveness of NATO put security first, given that it cannot rely on the American umbrella. The question arises as to how Europe can have a nuclear deterrent independent of the US, given that only France and the United Kingdom are nuclear powers, and it is difficult for them to extend their (limited) umbrella to all of Europe. The need for autonomous defense means not only increasing investment but also effective coordination and joint procurement. Furthermore, it is necessary to develop a sufficient defense industry. You cannot rely on military equipment from a supplier who can disable your weapon or on whom you rely for intelligence. In Germany, defense spending will not count toward the strict, self-imposed public deficit limit, and arms purchases will be made from European companies. The European Commission will be able to raise €150 billion to lend to member states for defense purposes.

Increased defense spending can stimulate the economy (if Germany doesn't sell cars, it can sell tanks) and innovation (historically, this has been the case), but for many Europeans, this is certainly not an ideal situation. In any case, the economy will have to be strengthened following the recommendations of the Draghi and Letta reports so that the welfare state does not suffer. Among other things, there is a need to develop a powerful capital market. A crucial element here is having a deep Eurobond market. Eurobonds are important for financing major European projects, but also for making the euro an alternative to the dollar as a global reserve currency. It is quite possible that the US will use the dollar as a weapon, and many countries may hesitate to use it for fear of being subject to retaliation. Stephen Miran, chairman of the White House Council of Economic Advisors, has proposed measures that will diminish the attractiveness of investing in US Treasury bonds. There is a clear opportunity for Eurobonds and for the euro. Europe must offer a stable environment for business and investment, in contrast to Washington's erratic policies, which generate uncertainty and instability. The recent relative movements of the U.S. and European stock markets are significant.

There is consensus that Europe must take a step forward in science. Now we have an opportunity, as the Republican administration has decided to punish the large universities (which concentrate 70% of the best in the world) for being woke. For starters, it has reduced the amount of National Institutes of Health research grants withheld from universities for general expenses, a crucial source of funding, from 40%-60% to 15%. The result is that many top universities have frozen hiring and PhD programs. Universities like Columbia have been defunded for alleged anti-Semitism (in addition to deporting a student activist), and then threatened to raise taxes on the yield on endowments (endowments) that feed university budgets. However, to attract talent to Europe, much of it of European origin, it will be necessary to improve the conditions for these researchers. Europe's strategic autonomy is also at stake here.

This opportunity will require greater political integration, which, in my opinion, will not happen without the formation of a highly integrated core in all aspects, which could be the eurozone. Furthermore, we must rebuild bridges with the United Kingdom; we need each other in many areas, but especially in defense and science. Finally, we must forge strong alliances with liberal democracies, and a united Europe can assume the leadership role left vacant by the United States.