Europe Must Shed Traditional Caution in Era of “Raw Power,” Says EU Chief

European Commission President Ursula von der Leyen issued a stark warning to the European Union on Wednesday. She stated the bloc must urgently accelerate its economic and military development to survive in a new global landscape. Her message was clear: the era of rules-based order is being challenged, and Europe must adapt quickly.

A World Defined by Raw Power

In a significant speech, von der Leyen framed the current international situation in blunt terms. “We now live in a world defined by raw power,” she said. She explained that this power manifests across multiple fronts, including economic strength, military might, technological dominance, and geopolitical influence. This assessment points directly to challenges from assertive nations like Russia and China, as well as global instability. For investors, this signals a fundamental shift in how the EU will prioritize its policies and spending, moving from purely market-driven approaches to strategies focused on security and strategic autonomy.

The Call to Move Faster and Boost Competitiveness

The EU chief argued that the bloc’s habitual “traditional caution” is now a liability. She emphasized that the 27-nation union must move faster to bolster its own economy and defences. This means reducing strategic dependencies, particularly for critical materials and technologies. For example, the EU’s reliance on Russian energy has been a major vulnerability, and its need for Asian semiconductor manufacturing highlights another key risk. Von der Leyen’s push is for Europe to build its own industrial capacity and supply chains in these vital sectors.

This drive for “open strategic autonomy” involves massive investment. It builds on existing initiatives like the Green Deal industrial plan and the Chips Act, which aim to subsidize clean tech and semiconductor production within Europe. Investors should expect continued large-scale public funding in these areas, creating opportunities in defence, cybersecurity, clean energy, and digital infrastructure. The goal is to make the European economy both more competitive and more resilient to external shocks.

Implications for Defence and Global Stance

The military aspect of “raw power” was a central part of the warning. The war in Ukraine has fundamentally altered security calculations in Europe. Von der Leyen’s comments reinforce a continent-wide push to significantly increase defence budgets and collaborate more on joint weapons development and procurement. This is not just about supporting Ukraine but about ensuring Europe can defend itself. A stronger, more militarily capable EU also seeks to be a more reliable partner within the NATO alliance.

For the financial markets, this sustained focus on defence suggests long-term growth for European aerospace and defence companies. It also implies that fiscal rules may be applied more flexibly to allow for this essential spending. Geopolitically, a Europe that acts with less caution and more unified purpose could become a more influential independent actor between the United States and China, potentially shaping global trade and technology standards.

President von der Leyen’s speech is a definitive call for a new European mindset. It acknowledges that global competition has intensified and that economic security is now inseparable from national security. The EU’s future growth and stability, she argues, depend on its ability to wield its own collective power decisively in this challenging new world.