Thanos Chonthrogiannis, Chief Economist at Trust Economics, lists the three major shocks that have disrupted the economy, technology and geopolitics of the EU.
The defeat in strategic areas, the submission to US pressure and the return of savage austerity will seal the path of Europe as we knew it, either leading it to a harsh reality of dependence and weakness or leading it to an awakening by uniting its peoples and leading it to complete independence in all sectors.
The shocks
In particular, according to Thanos Chonthrogiannis, in 2025 the remaining pillars of order that supported the order that had been established in the 20th century received three major blows that were enough.
1. The first was Russia’s looming dominance in Ukraine and, by extension, in Europe
For four years, the European Union and NATO had been engaged in a dangerous double game. On the one hand, they were rhetorically committed to a Ukrainian victory that they were unwilling to finance. On the other, they were exploiting this endless war to promote a new political and economic system at home: military Keynesianism, as the last line of defense against the deindustrialization of Europe.
In a continent where constraints prevented significant investment or deficit-financed social policies, the war in Ukraine provided an excuse to funnel public debt into the defense-industrial complex. The unspoken truth was that a perpetual war would serve a crucial function: it was the perfect engine for Keynesian stimulation of the stagnant European economy.
The contradiction was fatal: if the war in Ukraine ended with a peace deal, that economic stimulus would be difficult to sustain. However, achieving a victory that would justify the expense was considered too expensive economically and too risky geostrategically.
So Europe ended up with the worst possible strategy: sending equipment to Ukraine to prolong the bleeding without changing its course. Now that Russia is poised to prevail (a predictable outcome that US President Donald Trump has only prematurely brought about), the EU’s best-laid plans have been laid to rest. Europe has no Plan B for peace, because its strategic posture has become dependent on the continuation of the war.
Any modest peace deal eventually imposed on Ukraine by the Kremlin and Trump’s people will do little more than redraw a border. Whether or not Russia remains a threat to Europe, Europe is about to lose the pretext for its emerging military-industrial “boom,” and thus heralds a new austerity.
2. The second shock was that China won the trade war with the United States
The U.S. strategy, begun during Trump’s first term and intensified under Joe Biden, was a desperate move: tariffs to cripple China’s market access and embargoes on semiconductors and manufacturing tools to cripple its technological rise. In 2025, this strategy met its Waterloo, and Europe was once again the main side effect.
China responded with a skillful two-phase response:
- First, it weaponized its dominance of rare earths and critical minerals, causing a supply chain collapse that paralyzed not so much American as European and East Asian “green” industries.
- Second, and with a greater blow to America’s position as a global technological leader, China mobilized the “whole nation system” with a single goal: technological autonomy.
The result was a stunning acceleration of domestic microchip production, with SMIC and Huawei achieving achievements that make the US embargo on the West not just obsolete but counterproductive. This is probably the blow with the longest lasting consequences.
In 2025, the US proved incapable of slowing down China’s rise and, instead, inadvertently enabled the country’s technology sector to gain full independence. And Europe, having obediently imposed sanctions on China dictated by the White House, found itself in a disadvantageous position: locked out of the lucrative Chinese market for its high-value products, but without benefiting from generous subsidies from American Keynesianism…
By choosing to act as a strategic subcontractor to the US, the EU accelerated its own deindustrialization. This was not just a loss in a trade war; it was a geopolitical “checkmate,” and Europe appeared only as a pawn on the losing side.
3. The third shock was the ease with which Trump won his own tariff war with the EU
At the end of their meeting at one of Trump’s golf courses in Scotland, choreographed by his aides to maximize her humiliation, Ursula von der Leyen, the president of the European Commission, struggled to present a handover document as a “landmark deal.” Tariffs on European exports to the US were raised from about 1.2% to 15% and in some cases to 25% and 50%.
The old European tariffs on US exports were scrapped. Finally, the Commission pledged $600 billion in investment by European companies in US industry – money that came mainly from the relocation of German investment to chemical plants in Texas and car factories in Ohio. This was not just a bad deal. It was an unprecedented capital-exporting treaty. It seals the EU’s transition from industrial competitor to claimant.
Europe is destined to be a source of capital, a regulated market for American products, and a technologically dependent, junior partner. To add insult to injury, this new reality is enshrined in a binding agreement that all 27 EU member states have now accepted, stripping the bloc of any pretense of sovereignty.
Some of the capital Trump needs to solidify his vision of a G2 world structured around the Washington-Beijing axis is now conventionally flowing from Europe to the West.
In the G2 world, the imaginary global village is a gladiatorial arena, where the EU and the UK now roam aimlessly. A new, harsher, colder world order has been erected on the grave of European ambitions.
