An Incomplete Reading of the New US Security Strategy
Victor Ângelo
The elites currently in control of federal power in Washington have a mistaken view of Europe. The document they have just published on the National Security Strategy (NSS) criticises most European leaders in an unacceptable and unfounded manner. Furthermore, it ignores the fact that a strong and united Europe is, among other things, a fundamental commercial and financial partner for the wellbeing and stability of both sides.
From a commercial perspective, trade with Europe in goods and services far exceeds any other bilateral relationship the US has. It focuses on technologically advanced products and sectors, which are vital for both economies and have a huge impact on their respective employment rates. Moreover, cross-investments between the two sides, made by European companies in American subsidiaries and vice versa, known as Foreign Direct Investments (FDI), contribute to a deep transatlantic economic integration. European companies are increasingly investing in various sectors of the American economy, with European figures accounting for almost half of all foreign investment in the United States. Imagine what would happen if part of that amount were diverted by Europe to other economies. In principle, I do not foresee this happening, despite the profoundly distorted, even absurd, assessment that the new strategy makes of European policy and Washington’s adoption of a whole series of other obstacles.
From a financial perspective, a significant portion of US federal debt is financed by capital markets in the EU and the United Kingdom. The American administration lives beyond its means, like many others. It constantly issues notes and government bonds to keep civil and military institutions running. The major difference compared to other states is that US debt securities are mostly acquired by foreign central banks and investment funds. They are considered an essential part of the sovereign reserves of the vast majority of states.
Japan, first and by a clear margin, and China, afterwards, are, as individual countries, the main holders of US Treasury bonds. China is closely followed by the United Kingdom. But the British portfolio, added to that of the EU, far exceeds the sum of the holdings of Japan and China.
Now imagine that the EU, by decision of the European Central Bank, naturally backed by the central banks of the eurozone, slightly reduced the purchase of new US securities and simultaneously placed a small portion of those it currently holds on the market, in order to diversify its currency reserves and strengthen the euro’s position as a global reference currency. The EU could buy more Swiss francs, British pounds, Australian dollars, currencies from Gulf countries, and Japanese yen. Such an initiative, carried out quite gradually, could not be presented as an act of hostility. It would be announced as a prudent measure to diversify risk and an essential step towards European financial autonomy. Nor should it be mentioned as a reaction to what was written in the NSS, but simply as a decision to adapt European reserves to new geopolitical realities. And also, as a process to increase the euro’s relevance on the international stage. The euro is the world’s second most important reserve currency, but its role falls short of the Union’s economic weight.
All this should be considered in light of the assertion of European interests, following the expression that is now part of everyday political life in the US: America first. By following that philosophy in Europe, each partner would look after its own advantages, but always within a complementary political framework. Europe must continue to see the US as an ally, even when it insists on the need to rethink its strategic autonomy and defend its system of values.
Regardless of what was written in the NSS, frequent conversations with President Donald Trump should be regarded as essential. I do not know whether Trump has read the new document produced by his collaborators or others. In any case, his policy is very much his own, entirely personal.
What was written above about the complementarity between American and European interests should be repeated as often as possible to the leader of the White House. The real enemy of both, especially in Europe, the North Atlantic, and the Arctic, is the regime of Vladimir Putin. That is the message, regardless of the opinion one may have of Trump. If Putin were to destroy or seize Ukraine, he would soon move on to the next phase, the devastation of other European states. Trump needs to understand that, if that were to happen, the negative impact on his own country would be enormous. The history of this brand-new era began with the Russian invasion of Ukraine. It cannot end with the suffocation of our values or the rupture of the alliance between Europe and the US.
