A More Self-Reliant European Economy

figurehead the same way right-wing parties have in the Trump era. In fact, many far-left leaders have rejected Biden as a leader who will bring about meaningful change, only perceiving his election positively as it indicates an end of the Trump administration. For example, the

Spanish Communist party released a statement expressing happiness at the end of the Trump

administration, but casting doubt that “the Biden presidency will mean profound changes in the foreign and domestic policy of the United States.”176 Fabien Roussel, the leader of the

Parti communiste français, congratulated Biden’s win but emphasized the victory of the 27 Democratic Socialist candidates who were elected in the Congressional race.177 While many on the far-left may consider Biden as a positive alternative to Trump, he is still viewed as a member of the establishment center-left, and thus unlikely to enact policies they support.

American influence on the European political landscape and the effectiveness of European policies on issues such as climate change is not inconsequential. The Trump

Presidency and the 2020 U.S. election ushered in a new era of uncertainty for America’s

European allies and as such, the resounding response from European nations was a call for

greater self-reliance and a desire to untether themselves from the increasingly unreliable

American influence.

The primary area in which European leaders and economists recognize a need to push

for greater autonomy is in the economic sphere. This desire for a more self-reliant European

economy is not a recent phenomenon but one that has been the result of increased economic

integration within the EU and the rising power of Europe’s single market. This desire has

been exacerbated by drastic and unexpected events such as Brexit, the coronavirus pandemic, and President Trump’s trade wars. The emphasis on greater economic independence is,

unsurprisingly, driven by Europe’s largest economies, France and Germany.

OVERVIEW The EU has long grappled with facilitating its evolution towards a more self-reliant

economy, the coronavirus pandemic and pressure to exhibit post-Brexit strength have also amplified this necessity. The uncertainty surrounding the U.S. election and President Trump’s tariffs on EU member states have prompted renewed focus among European economists, many

of whom believe that recent fluctuations in American politics indicate that the U.S. cannot be counted on as a reliable trading partner. The UK’s exit from the EU brought the strength of the

union and the benefits of the European single market into question. Britain’s departure may diminish the EU’s leverage in negotiating trade deals due to losing business brought by the

British economy, but this remains to be seen.178 Now more than ever, the EU needs to strengthen

their consumers’ confidence in the stability and power of the European economy.179

On January 19, 2021, the European Commission issued a new set of policies aiming to push the European economy towards greater self-reliance.180 Undergirding this new strategy is

the goal of reinforcing the EU’s economic and financial institutions. The Commission’s strategy is three-fold: first, promote a stronger international role for the euro by issuing high-quality eurodenominated bonds under NextGenerationEU, the EU’s economic recovery plan in response

to coronavirus; second, develop the infrastructure of EU financial markets by identifying vulnerabilities and exploring ways to ensure an uninterrupted flow of financial services; and third, implement and enforce the union’s own sanctions to highlight the EU’s strength on the

global economic stage.181 The euro-denominated bonds, along with other mechanisms, will

increase the liquidity of the EU’s capital markets rendering them more attractive to foreign

investors. When the strategy was announced, Paolo Gentiloni, the European Commissioner for the Economy said, “strengthening the international role of the euro can shield our economy and

financial system from foreign exchange shocks, reduce reliance on other currencies and ensure lower transaction, hedging, and financing costs for EU firms.”182

The Commission’s latest strategy comes in the spirit of maintaining its historic identity

as a champion of multilateralism while pursuing realistic and attainable goals. The actions of the

Trump administration in the U.S. and the implications of Brexit suggest a new global economy of self-reliant players. The three pillars of the Commission’s proposal highlight the EU’s

dedication to ensuring its own economic security amid rising economic protectionism.

EU CONSIDERATIONS In the eyes of many European leaders, by threatening to leave NATO, levying harsh

tariffs on the EU, and implementing isolationist policies, Trump has set dangerous precedents

which have “widened the Atlantic.”183 Many leaders are left questioning whether Biden will be able to repair the United States’ economic relationship with the EU.

While many European countries expressed relief at the end of the Trump administration, there are reservations regarding what Biden’s administration will do to improve economic relations with the EU. Members of Biden’s foreign policy staff, such as Secretary of State Anthony Blinken, have stated that the U.S. will work towards “ending the artificial trade war” with the EU, which shook the U.S. economy and raised prices on imported goods for consumers.184 However, while Biden may not explicitly share Trump’s “America First” protectionist ideology, his “Made in America” plan continues Trump’s legacy of domestic prioritization. Biden may be slow, or even fail to address issues such as the metal tariffs on Europe, the EU’s problematic digital tax on U.S. tech companies, and the longstanding BoeingAirbus disputes involving different environmental standards on carbon emissions. These are

tangible concerns for Europeans who have observed Biden’s desire to go further than Trump in favoring domestic industries and firms.185 Majorie Chorlins, senior vice president of European

Affairs in the U.S. Chamber of Commerce, warned that Free Trade Agreement negotiations

between the U.S. and EU are unlikely to occur soon.186

However, there is hope that Biden will seek to revitalize a transatlantic trade agreement. Biden has already voiced concerns over the trade negotiations between the EU and China. Many European leaders cautiously hope that President Biden will address transatlantic grievances, though the timeframe of such priorities remains unclear. Time will ultimately tell how EU-U.S.

relations fare under the Biden administration relative to pre-Trump relations, but one thing is certain: cooperation and communication will improve. April 2021