The European dilemma

Jean Monnet, one of the founding fathers of the European Union, once said that Europe will be built through crises, and it will be the sum of their solutions. At present, Europe is facing multiple crises, as anyone glancing at today’s newspaper headlines can see. Growth all across the EU is slowing down, loss of competitiveness is now a daily reality in European markets and energy costs are soaring, with talk of rolling blackouts getting closer to becoming a reality.

This reversal of fortune, unfortunately, does not confine itself to economics as, from a security perspective, the European Union situation couldn’t be more dire. Shortages of TNT and chemical precursors for explosives are at historically high levels since 2022, and defense production remains far from matching operational demand. Compounding the problem, much of Europe’s existing military forces were trained and equipped for asymmetrical, expeditionary conflicts rather than the kind of high-intensity, industrial-scale warfare now unfolding in Ukraine.

Europe is indeed being shaped by crises, just as Monnet predicted. Yet contrary to his optimistic logic, the current moment reveals a deep structural contradiction: instead of producing cumulative solutions, today’s European crises increasingly negate one another. Not least because the very solutions Europe turns to now come from two rival power centers, the United States and China.

For all the strategic unease now surrounding the rise of China, Europe’s economic reality remains anchored in a far less dramatic truth: the industrial system of the European Union is deeply entangled with Chinese production capacity, accounting for roughly 20–25% of key industrial inputs. This is not the result of a recent policy shift, but of three decades of globalization that have embedded Chinese manufacturing at the core of Europe’s supply chains.

China today no longer functions merely as a low-cost assembly platform. It has become a central processing hub for intermediate goods, refined materials, and critical industrial inputs that quietly sustain European production lines. From automotive electronics and battery cells to chemical components and precision machinery parts, a growing share of what is “made in Europe” now passes, at some stage, through Chinese industrial ecosystems.

This interdependence is most visible in Europe’s flagship industries. German carmakers, Europe’s industrial backbone, sell millions of vehicles annually into the Chinese market while at the same time relying on Chinese suppliers for key electronic and energy-storage components. In civil aviation, Europe’s most advanced manufacturing sector remains tied to Chinese airlines as one of its most dynamic sources of future demand.

Nowhere, however, is this structural dependence more pronounced than in the green transition. The vast majority of the world’s solar panels, over 80%, a dominant share of lithium-ion batteries, around 70%, and most rare-earth processing required for wind turbines and electric motors are concentrated in China. Even when raw materials are mined elsewhere, the industrial bottleneck increasingly lies in Chinese refining and fabrication.

Any change to this relationship would inject supply shocks, industrial dislocation, renewed inflationary pressure, and delays in Europe’s own climate transition. Whatever its strategic anxieties, Europe’s economic system remains, for now, inseparable from Chinese industrial gravity.

If China represents Europe’s industrial gravity, the United States remains its strategic keystone. For all the debate surrounding European strategic autonomy, the security architecture of the European Union continues to rest, in its most fundamental aspects, on American military power, intelligence capabilities, and deterrence guarantees. This reliance is structural, not ideological, rooted in decades of institutional integration within the North Atlantic Treaty Organization.

The war in Ukraine exposed the full asymmetry embedded within this structure. High-intensity warfare compressed strategic decision-making into a scale that few military systems can sustain alone. Once again, the burden of escalation control, battlefield intelligence, and long-range deterrence fell primarily on Washington, which supplied over half of Ukraine’s military aid. Europe’s subsequent rearmament has accelerated, yet much of that modernization continues to pass through American standards, platforms, and production lines, quietly extending this reliance forward in time.

Yet Europe’s dependence on the United States is not confined to the military sphere. Global liquidity still flows through the dollar system, which dominates nearly 60% of global reserves. Access to deep capital markets, advanced semiconductors, cloud infrastructure, and key digital platforms remains tightly interwoven with American firms and regulatory frameworks.

Sanctions enforcement further reinforces this gravity, as much of the world’s financial plumbing passes through U.S.-controlled nodes. In this sense, Europe’s exposure to American power is not limited to security guarantees; it is embedded in the financial and technological architecture that underpins its modern economy.

Between these two poles of dependence, the room for European manoeuvre has narrowed sharply. The European Union now operates in a strategic corridor defined by incompatible pressures. From the United States come demands for tighter security alignment, technological controls, and strategic coordination. From China come expectations of commercial continuity, market access, and industrial cooperation. Fully satisfying both has become structurally impossible.

To face these pressures the EU has adopted a de-risking policy. Its purpose is to narrow the most excessive forms of economic, technological, and supply-chain exposure, most notably in relation to China, without dismantling the broader framework of global exchange. The focus has shifted toward dispersing suppliers, securing access to critical raw materials, shielding selected technologies, and reinforcing Europe’s capacity for independent action. This logic has already found clear expression in the gradual exclusion of Huawei equipment from European 5G networks across most EU states since 2020. Yet this effort unfolds within clear limits. Markets remain open. Trade continues to flow. Strategic adjustment proceeds, not through withdrawal, but through cautious recalibration at the margins of an already entrenched system.

Europe thus finds itself navigating a landscape no longer organized around a single axis of power but around competing centers of gravity. Its strategic reliance on the United States and its economic dependence on China are circumstances inherited and controlled under duress rather than decisions freely made. Yet as the global system fragments into a more openly multipolar order, an unresolved question begins to surface: can Europe eventually escape this rigid binary altogether or is it destined to remain structurally bound between the two poles that define its present?