The world is entering a new phase of geopolitical and economic disruption, and Europe is feeling the tremors. The assumptions that long underpinned the continent’s security and prosperity – reliable US guarantees, open global markets, and a stable international order – are eroding. At the same time, technological leadership is shifting eastward, conflict has reemerged in Europe’s backyard, and defense has moved from the periphery to the center of politics.
What’s emerging isn’t just a more unstable world, but a more competitive one. The question now is not whether Europe must adjust, but whether it can do so fast enough, and boldly enough, to shape its own future.
That question was front and center at this year’s Salzburg Summit, where I had the opportunity to moderate a panel featuring Benjamin Haddad, Minister Delegate for European Affairs (France), Nemanja Starović, Minister of European Integration (Serbia), Claudia Plakolm, Federal Minister for the EU, Integration and Family (Austria), and Gerhard Zeiler, Chairman of Warner Bros Discovery International. Together, we explored how Europe must recalibrate its Strategic Compass to remain competitive, secure, and globally relevant.
The message I took away was clear: the era of putting national interests above Europe must end. What Europe needs now is coordinated action, renewed ambition, and a mindset that matches the scale of the challenge.
If you look at the longer-term trend, engaging with Europeans as partners has become very secondary in US politics – on the left and on the right.
Haddad put it bluntly: the era of strategic illusion is over. The assumption that the United States will indefinitely underwrite Europe’s security or shoulder the burden of global trade disruptions no longer holds. Europe, he argued, has failed to grasp the long-term trajectory of US foreign policy.
“Under the first Trump administration, many Europeans thought it was just a parenthesis. But if you look at the longer-term trend, engaging with Europeans as partners has become very secondary in US politics – on the left and on the right.”
In other words, it’s time to take responsibility for our future, and that doesn’t stop at increasing defense spending. Europe must build technological capacity, restore control over critical supply chains, and invest in the innovation ecosystems that underpin global competitiveness.
As Haddad warned, “We missed the boat on social media. On AI and quantum, we’re behind.” Part of the challenge, he said, is cultural. “There’s a reflex in Europe to restrict before we create. That needs to change if we’re to develop global tech champions.”
He pointed to the EU’s €150bn ($1.77bn) SAFE fund as a test case: a vehicle not only for boosting military readiness but also for strengthening a sovereign European defense industrial base. “We have to make sure this is, first and foremost, bolstering our sovereign European defense industrial base,” he insisted.
For business, the implications are clear: a more self-reliant Europe will increasingly seek to build local champions and keep value creation within the region.
Plakolm redirected the conversation inward. Strategic autonomy, she said, starts not with geopolitics but with economic competitiveness. Europe’s SMEs, she noted, are hampered by excessive regulation, fragmented financial markets, and cost unpredictability.
“We need to think of Europe not just as the source of regulation, but again as a place of production and innovation,” she said.
She also highlighted the tendency for national regulators to gold-plate EU rules – a particularly acute issue in Austria. “Gold-plating is a crucial problem when it comes to reporting obligations and things like that,” she warned. Her solution: boldly engage in deregulation, even at the European level. “We need to be strong and courageous enough to say goodbye to some regulations forever.”
Plakolm also pointed to the next generation as a force for reform. “Young people care deeply about fairness, peace, and sustainability,” she said. “They are already European in their thinking, and they expect institutions to reflect that.”
As we discussed, Europe doesn’t lack capital; households here save three times more than their US counterparts, but much of it does not find its way to European startups, scale-ups, or investment priorities. Without the establishment of the capital markets union and regulatory harmonization, that capital will continue to flow outward, weakening Europe’s financial firepower in a multipolar world.
Here too, business has a role: to speak up, engage policymakers, and help push for regulation that enables innovation rather than constraining it.
Look beyond the traditional core; the Western Balkans are ripe for investment, partnership, and integration.
Starović offered a vital perspective from outside the EU’s inner circle. Europe’s strategic center, he reminded us, remains incomplete.
“There is a geopolitical void in the middle of the European continent,” he said. “We need to fill it for political, geopolitical, and economic reasons.”
He positioned Serbia, a fast-growing economy with an expanding defense sector and deepening cooperation with European institutions, as part of the solution, not the problem. Serbia’s acquisition of a squadron of French Rafale jets, he pointed out, is more than a purchase – it’s a 30-year commitment to technological and strategic interdependence.
Beyond defense, Serbia’s energy, logistics, and renewable potential offer concrete opportunities for Europe’s regional resilience. “We need billions in investment, but the payback is clear,” he said.
More broadly, Serbia’s commitment to EU values and legislative harmonization signals a genuine desire to be part of Europe’s shared future. The message to business? Look beyond the traditional core; the Western Balkans are ripe for investment, partnership, and integration. “We have a lot to offer to ‘Team Europe,’” he concluded.
Zeiler brought the global business perspective and a reminder that Americans consistently get Europe wrong. “We are underestimated. But believe me, being underestimated is not the worst position if you act now.”
Europe has world-class infrastructure, a well-educated workforce, and industrial strength. But as he noted, it suffers from fragmentation and inertia. “We have exceptional education, an industrial base we must defend, and better social stability than the U.S. But we need to harmonize capital markets, simplify regulation, and stop overburdening small entrepreneurs.”
He pointed to Europe’s creative industries – from film to fashion – as an underutilized lever of soft power and global influence. “That influence is underleveraged, but it can be a key part of our economic strategy.”
His call to action was blunt but constructive: “We must put Europe first, not national markets, not national pride. Europe must come first.”
We should not settle for a deal with the US that’s worse than what the UK got. If we negotiate, it has to be from a position of strength.
If there was one unifying thread through the panel, it was this: Europe must project strength. Tariffs, trade distortions, and shifting alliances aren’t theoretical; they shape corporate realities every day.
“Tariffs can never be the solution,” Plakolm cautioned. “We need solutions that broaden our economic field.”
Haddad went further: “We should not settle for a deal with the US that’s worse than what the UK got. If we negotiate, it has to be from a position of strength.”
And Starović offered a hard truth from experience: “Serbia was hit with a 35% tariff based on a supposed trade surplus with the US, which is false. It’s a credibility test for the system. And we’re not alone in this.”
Europe is home to the world’s largest individual consumer market, a behemoth of 450 million people. It can meet any world power at eye level, but only if it chooses to act as one. That sense of unity, of shared purpose over national reflex, is what the Strategic Compass seeks to institutionalize. It’s also the mindset business leaders must adopt.
The time for hedging or hesitation is over. Europe’s future won’t be handed to it. It must be claimed: with urgency, confidence, and coordination. The stakes aren’t just geopolitical. They are strategic, economic, and deeply personal for every business leader invested in the region’s future.
In sports, we like cheering for the home team. This summer, at the UEFA Women’s Euro in Switzerland, fans dressed in national colors, celebrated their teams, and cheered on their players. Europe doesn’t have a national team except in golf, where, every two years, Europe’s best golfers – from Norway to Spain and Northern Ireland to Italy – form ‘Team Europe,’ cheered on by fans from across the continent. That’s the spirit we must now harness. This is Europe’s moment, not to react, but to lead.
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