Will ‘strategic autonomy 3.0’ deliver?

The vision of Europe as an autonomous global actor has much in its favour—except that we have been here before.

There have been growing calls for Europe to pursue an agenda of ‘strategic autonomy’ on the global stage. The ambition, voiced by the French president, Emmanuel Macron, the German chancellor, Angela Merkel, and the European Commission, is to bolster Europe’s geopolitical, technological and economic independence, in an increasingly unpredictable and multi-polar world.

The ideas behind this agenda are not however new. Indeed, this is ‘strategic autonomy 3.0’—the latest in a long line of attempts to carve out an independent space for European institutions and nation-states in the global arena.

Distinctive institutions

Although the founding fathers of European integration, Jean Monnet and Robert Schuman, never used the phrase, the desire to secure strategic autonomy was inscribed in the process from the outset. ‘Strategic autonomy 1.0’ was forged after World War II, in a context shaped by the cold war and the centrality of the United States in the remaking of the western world.

This first version represented a compromise. European alignment with US economic and geopolitical power would afford European nation-states a space within which to cultivate distinctive institutions at the national and supranational levels. In this context, welfare systems were strengthened, full male employment was achieved and collective-bargaining institutions were cultivated across the continent.

The constraints on ‘strategic autonomy 1.0’ became clear as the postwar system began to unravel in the 1970s. The breakdown of the Bretton Woods global financial arrangements and the rise of neoliberalism sent shockwaves throughout Europe: currency instability, rampant inflation and rising unemployment.

It was in this context that ‘strategic autonomy 2.0’ was born. By the mid-1980s, European elites had accommodated to the logics of an increasingly neoliberal, US-led order. It was hoped that monetary co-ordination of national currencies, culminating in the creation of the euro in the 1990s, would lay the foundations for an eventual challenge to the primacy of the dollar. The single market would similarly create the conditions for the growth of European firms capable of competing on the world market.

Dangerously embroiled

The limitations of ‘strategic autonomy 2.0’ were however starkly revealed as the neoliberal order entered into crisis. In the aftermath of the 2008 global financial crash, it became clear that European economies had become dangerously embroiled in an unstable Anglo-American financial system and that the euro was incapable of challenging dollar primacy. On the geopolitical level, a coherent European foreign policy struggled to emerge, as tensions with Russia and growing concerns over the influence of China failed to engender a unified response.

Europe’s contemporary ‘strategic autonomy 3.0’ agenda is taking shape in this new, volatile global context. It emerged in the aftermath of the ‘Brexit’ referendum and the election of Donald Trump as US president in 2016, amid widespread concerns that Europe’s traditional partners could no longer be relied upon. Europeans, in Merkel’s words in 2017, needed to ‘take their destiny into their own hands’. In this vein, the incoming commission president, Ursula von der Leyen, promised in 2019 to run a ‘geopolitical’ commission.

Concretely, this agenda has been linked with defence initiatives such as PESCO (‘permanent structured co-operation’) and the development of what Macron terms ‘autonomous operating capabilities’. In his vision, this would be accompanied by an independent foreign policy, through which Europe would disentangle itself from the emerging US-China rivalry and reduce its dependence on external powers. Strategic autonomy has thus been linked with proposals ranging from the ‘onshoring’ of key supply chains to a more assertive industrial strategy, with reforms to EU merger and acquisition law to encourage ‘European champions’.

‘Strategic autonomy 3.0’ ostensibly goes beyond the previous iterations, hinting at a project of European independence which spans economic, monetary and industrial policy as well as trade, defence and foreign affairs. It also calls for greater distance from US power than previously imagined. Nonetheless, strategic autonomy 3.0 has to contend with many of the same constraints and limitations as its predecessors.

Firmly entrenched

Key axes of US power remain firmly entrenched, particularly in the monetary and financial sphere. Contrary to the expectations of the euro’s most fervent advocates, the dollar endures as the pre-eminent international reserve currency. European banks remain heavily reliant on dollar liquidity and structurally subordinate to the power of the Federal Reserve as a global lender of last resort.

The commission hopes to reverse this dependence through its ‘capital markets union’ agenda. However, this approach reproduces previous failed attempts at challenging US primacy by essentially mimicking its financial structures. There are good reasons to think it won’t work this time either. 

Crafting Europe into a more integrated and globally competitive economic bloc would require sustained stimulus packages and industrial upgrading across the EU states. In turn, this would demand substantial expansion of the EU budget, large fiscal transfers between the European ‘core’ and ‘periphery’ and new, solidaristic financial instruments, such as eurobonds. Any attempt to advance such a strategy would face profound institutional obstacles and political opposition.

Similarly, the development of a more unified European foreign policy faces the dual challenge of securing popular consent for greater supranational integration and of drawing together the divergent orientations of EU member states. As recent tensions between Germany, the commission and eastern-European countries over the proposed Nord Stream 2 project show, this is by no means an easy task.

The earlier projects of strategic autonomy unravelled as a result of Europe’s structural dependence on the US and internal tensions within European politics and political economy. Will ‘strategic autonomy 3.0’ agenda succeed where these attempts failed? Squeezed between Washington and Beijing, European leaders hope to answer this question in the affirmative—but history suggests the outcome could be very different.

This draws on arguments developed in an accessible Journal of Common Market Studies article.