How can the European Union woo Donald Trump? Why immigration is beneficial and morally right? And what is the EU’s potential for change and reform? Leszek Jazdzewski (Fundacja Liberte!) talks with Philippe Legrain, a former economic adviser to the president of the European Commission, a Visiting Senior Fellow at the London School of Economics’ European Institute, and the author of Them and Us: How Immigrants and Locals Can Thrive Together (2020) and European Spring: Why our Economies and Politics Are in a Mess and How to Put Them Right (2014).
Leszek Jazdzewski (LJ): In your recent column which you wrote for the Project Syndicate, you argue that there are at least three different ways in which Europe can woo President Donald Trump. Can you tell us briefly why and how this be done?
Philippe Legrain (PL): First of all, the reelection of President Trump is a devastating blow, not just for the United States or the EU, but also to the very idea of the West – the idea of a common sense of purpose and values between the US and Europe, and a security alliance and close economic political relations which are based on those shared values.
At the same time, we need to try and make the best of a tragically awful situation because Europe is weak. It is weak economically. Poland is doing obviously better than most, but many of its economies are struggling to grow. It is also reliant on exports. However, above all, it is weak militarily. We have collectively sheltered under the US nuclear umbrella and kidded ourselves that basically we, as Europeans, did not need to defend ourselves because no one would dare threaten us.
That illusion is now shattered. It was shattered first by President Putin’s aggression in Ukraine, and now it is shattered by the re-election of a president who takes a transactional attitude to European security at best. On some occasions, he is frankly hostile to the EU and to European countries. All that is alarming.
Therefore, the question is how do we make the best of this awful situation? I think we need to try to win over President Trump, to show him that it is in his interest to take a different attitude towards Europe than he has done in his campaign pronouncements and tweets.
In order to do that, first of all, we need to emphasize personal relations. In my piece for the Project Syndicate, I stated that the ideal person to send to woo Donald Trump was Giorgia Meloni, the nationalist right-wing leader of Italy, who is well received in conservative circles in Washington, who is lionized by Elon Musk and who, despite the fact that I might not agree with her politics, in her government has acted more like a traditional conservative (and certainly more in keeping with the interests of the EU as a whole than might have been feared beforehand) and who, crucially, has been anti-Putin and pro-Ukraine. Start with her.
Secondly, we should come bearing gifts. In this regard, first and foremost, Europe should try to avoid a trade war with the United States. This means the EU shall offer Trump something that he can declare as a win on trade – without the need to have to jack up tariffs in order to achieve it. One obvious approach is cranking up production. Even now, shockingly, the EU still buys gas in liquid form Russia. It would make sense for both sides for us to increase our purchases from the US. Moreover, we should also look at potentially reducing tariffs that the United States finds offensive – for example, the fact that we have a high tariff on car imports or on food products. That is the first step.
The second thing regards defense. In this area, Poland has been in the vanguard of taking a much more proactive approach and saying that Europe needs to boost defense spending – and there has been huge efforts in this regard, for instance, in Estonia, but much less so in France, Germany, or Great Britain. Therefore, Donald Trump is not wrong in saying that Europeans need to do more to pay for their own defense. As such, it makes sense to hedge against the probability that Trump will not come to the defense of European countries that do not spend enough in this area.
As I suggested in my article, Europe needs to go from the 2% of GDP target for defense spending to 2.5% next year – and ideally 3% by the end of Trump’s four years term. Poland comfortably exceeds that. Obviously, it is a front-line state. And if Ukraine falls, Poland is next in line.
In such a case, most pressingly, the EU must try and convince Donald Trump that to abandon Ukraine would make him seem weak. That it would not be a fantastic deal that he would secure from President Putin, but actually a terrible one. That he would look like he is cutting a running – just what he accused President Joe Biden of doing in Afghanistan. That he would have, in a sense, been outmaneuvered by another strong man that he admires, Vladimir Putin. And that China, which he cares so much about, would come to a conclusion that the United States (and Donald Trump in particular) are ultimately much weaker than they portrayed themselves. Therefore, that it is in his personal interests to actually strike a fairer deal and that – if it does not achieve the maximal objectives that Ukraine might hope for – he at least brings together a peace with security for Ukraine on not too unjust terms.
Meanwhile, many people have objected to involving Prime Minister Meloni in this process. However, Europe cannot afford to have hangups about that. On the other hand, others have said that we should not be giving gifts to Trump. But the reality is that Europe is weak.
In the medium term, Europe might grow stronger as a result of having to fend for itself. However, in the short term, we simply cannot do it as the situation in Ukraine is most pressing. And if Ukraine falls, then Poland, the Baltics, and Europe in general are in grave danger. Therefore, it is absolutely essential that any peace that is achieved in Ukraine be on fair terms that do not lead to further Russian aggression.
LJ: What should the EU’s strategy towards China be? Should it take into account the fact that we still need security guarantees from the United States? And does it mean that the trade relationship with the US (and a relationship in general) is essential?
PL: Europe is in a very difficult position. Germany in particular, and other smaller countries as well, have grown unduly reliant on exporting to and producing in China. This reliance makes them very vulnerable in the new geopolitical situation in which the EU and China are inevitably going to be increasingly in conflict whereas the US (which provides European security) is likely to take an even more hostile attitude towards the Chinese and to demand that the EU follows suit.
Meanwhile, we must bear in mind that Donald Trump is completely erratic. Whereas there was some kind of systematic well-thought-through basis to the way in which the Biden administration ratcheted up its economic and political pressure on China, it is quite possible that Trump could start a trade war with China, expect the Europeans to follow suit, and then strike a wonderful deal with Xi Jinping, which completely undercuts the European position. Therefore, it is a very difficult situation – even if Europeans wanted to engage and follow suit.
Potential economic consequences are very real. If we were to envisage a positive scenario, insofar as to say that Donald Trump imposes a 10% or 20% tariff on imports in general and a 60% tariff on imports from China, then in relative terms, the production in Europe is less disadvantaged than the production in China. Therefore, one could predict that Europe might gain from that.
However, given the fact that the Chinese economy has weak demand, they are struggling with a local government debt crisis. They are struggling with a property crisis, not unlike what we suffered in Europe 10, 15 years ago. They are reliant on having exports and a current account surplus in order to sustain growth, which may lead to export diversion and a situation in which many of the products that they were planning or hoping to sell in the United States, they would try and sell in the European Union instead.
The big difference that now exists is that, before, the European economy and Chinese economy were largely complementary (they made different products), whereas now they are increasingly competing. In some cases, they have competed so well that the European equivalents disappeared.
Solar panels are a great example of this phenomenon – at one point, Germany was dominant in the area of solar panel production, but now there is no German solar industry at all. Obviously, the production of electric vehicles (or cars in general) is a huge industry. Currently, Germany – and Europe’s car industry in general – are ill-equipped to compete with Chinese imports. I suspect that Europe is going to go down a different route to the United States, as it seems that the United States is going to shut its market entirely to Chinese EVs. Following a combination of measures (including tariffs), sales are going to be negligible. Therefore, the European strategy is going to focus on encouraging car production by Chinese companies within the EU. This way, at least some of the benefits (in terms of employment and technological spillover) will still exist.
It is ironic that we are now talking about technological spillover going from China to Europe, whereas in the past, it was always happening in the opposite direction.
LJ: On which issues Europeans could potentially work with Donald Trump to help him achieve what he really wants?
PL: We are going to have to work with President Trump because soon he is going to be the most powerful person in the world. As such, we have no choice. If we were to look for a potentially positive scenario in Ukraine – and I admit that this could be grasping at straws – what helps is the fact that it seems that Trump wants the war to be over. He wants to make it a big win and a shining example of his ability to strike a deal.
At the same time, at the moment, Russians are making steady gains, and it is possible that Trump would suggest a deal, as Vladimir Putin would outright reject it because he feels that he is winning, so why would he want to do a deal now. At which point, one could imagine that Trump was offended by the prospect and felt the need to show Putin that he meant business.
We also see some Republicans say that we could have a huge ramping up of military aid to Ukraine on a temporary basis, but simply in order to show Russians that we, indeed, mean business, and then bring them to the table once this has happened. This would be a scenario that would be extremely positive for both Ukraine and Europe. This is also the area in which we might collaborate.
Furthermore, in terms of the tariffs, they clearly are not something we could collaborate on, as – in a sense – from the US perspective, they are ‘America first’. As such, they target allies as well as perceived rivals and enemies in an equal measure. The win-wins, as I mentioned before, can be simply commitments to buy more from the US. The obvious thing to buy on a larger scale is liquid natural gas. Another one is American weapons and military equipment.
The EU is now moving forward with increasing spending on defense with joint purchasing and joint procurement to a certain extent. While I can understand why some European politicians think that this ought to be industrial policy in disguise – and we clearly need to have our own defense industry here in Europe – at the same time, it makes sense because the United States make great equipment. Buying more US military equipment also makes sense geopolitically. Poland has already been doing that, which is a wise strategy – and it is certainly a win-win.
Meanwhile, I do not think there is much that we can do domestically. It is almost impossible to deport a million people, let alone 10 million people or more, who are living with an undocumented status in the United States. Certainly, you can deport the people who have just arrived and who are being held in camps across the US border – they can be deported readily and, indeed, are deported on a large scale. However, the people who have been in the United States and living in in communities for a long period of time are hard to identify and will be extremely difficult to uproot. It is also easy to imagine how such a move could lead to civil unrest if this were to happen. Therefore, the numbers will not be as high as Donald Trump says.
Nonetheless, the issue of potential deportation is mostly about theater. Donal Trump won the first election on the basis of his slogan ‘Build the wall’ and get Mexico to pay for it. Clearly, the bit about Mexico paying was forgotten, but part of the wall which had actually already been built. Therefore, Trump needed a new slogan for this year’s presidential election, and he focused on mass deportation. As a result, an increase in deportation is to be expected. It would be nasty for some people, but it will not be on the scale that is envisioned because outside wartime nothing like this has ever happened – nor is it likely to happen.
LJ: When it comes to the issue of migration to Europe, should the EU differentiate between illegal migrants depending on where they are coming from? And what are the possible arguments for controlling the borders and introducing an open migration policy at the same time?
PL: I strongly believe in the benefits of free movement of people – not just in economic terms, but also in human terms. My mother was a refugee from Estonia. And so, my personal family history has taught me that people sometimes need to flee their country in order to stay alive, or to remain free. That is not something ignoble, but something actually fundamental.
Even though some of the people who come to seek asylum in the EU are not really asylum seekers, many others are. If we are going to have a policy of not allowing people to turn up at the border, then there need to be safe and legal means for people to seek asylum instead.
When it comes to Australia and Canada, both of them have large refugee resettlement policies, which most European countries do not. Now, there has been a big exception made for Ukrainians, which is fantastic, but there are also other places where desperate people need resettlement.
As regards the political context, the global context is that almost all asylum seekers and refugees are in developing countries next to the country of their origin, rather than turning up in Europe. Therefore, if we are going to have a policy of tough border control, then it needs to be combined with safe and legal means for people to seek asylum.
In terms of the economic aspect, we see that even the governments that are most hostile to immigration and who cast it as a threat to their national and Christian identity (like the likes of Viktor Orban in Hungary), they tend to increasingly combine that approach with policies of allowing in foreign workers, because even they recognize that allowing in people to do jobs that locals either no longer want to do or cannot do is beneficial. There is a similar disconnect in Italy, where there has also been a large increase in economic migration under Giorgia Meloni.
Meanwhile, Poland, even under the previous government, has been allowing in migrants from elsewhere to work. If you live in a relatively rich country – and Poland is now a relatively rich country too – which has increasing numbers of elderly people that need to be cared for, while at the same time dwindling numbers of young people who do not particularly want to do all work caring for the elderly, with citizens that would like some help in paying the taxes which are going to pay for the healthcare and social care of the elderly, a country that increasingly wants to compete internationally (for which it requires talented people, not all of whom were born educated in that country), then that openness to migration is necessary for economic growth.
We can see that within the European Union. The country where I was born and lived in, the United Kingdom, has been a huge beneficiary of migration – not least from Poland, but also from many other countries. We can see that in terms of new companies that migrants found, as well as in terms of new ideas and Nobel Prizes generated and won by people who were born abroad. It is also visible in terms of the way that a whole range of public services on which people rely, and which disproportionately employ immigrants.
This is why it is important to engage with the political and cultural objections to migration. And, yes, if there is to be control, there needs to be alternatives to crossing a border which are safe and legal. And, yes, politicians need to be honest with people that if you want to have a thriving economy in the 21st century, then you need to be open to foreigners to a certain or a larger extent in a whole range of sectors and industries.
LJ: Ten years ago, your book European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right (2014) was published. How do you see your observations from that time now that a decade has already passed? Is there anything you would change in light of the crises that have occurred in the last ten years?
PL: I think that the book has aged well. Given that it was deliberately broad in its scope, I covered many of the issues which are still relevant today. Now, the crisis in the euro zone is behind us and, therefore, we can see that the EU institutions and many governments have recognized that the policies they pursued during the crisis were mistaken.
Therefore, implicitly, I was right in stating that most of that fortunately is no longer a pressing issue, although one cannot rule out – given the fact that the Eurozone is only partially complete – that a revival of a financial crisis in the Eurozone could happen. One example of that would be France. If you continue to have French governments running large budget deficits, and on top of that you have potentially the election of President Marine Le Pen of the Eurosceptic National Rally in 2027, it is not inconceivable that we could see a financial crisis in France. In terms of the reforms, the economic and political reforms which the second half of my book advocated for, it is striking how little has been done.
One of the things that I did say in the book was that actually Germany was much less of a success than it seemed at the time. That, actually, it had not reformed, but rather it had merely engaged in cost cutting (mostly at the expense of German workers and its neighbors in the Eurozone) and that, ultimately, this was a self-defeating strategy. It was not investing enough, its companies were not flexible enough to deal with dramatic technological change, and it was too reliant on exports. I think that this analysis was perceptive and, indeed, right.
The biggest challenge facing the EU is that – even though the global economic and financial crisis is long gone (and you’ve seen growth rebounding in the United States and many other countries, that, again, Poland is doing much better than Germany or France) – growth has been sluggish in the EU as a whole. Especially in hugely important sectors (technology as a whole, and AI in particular), the EU barely has any presence at all.
You can live quite well as a museum if you are small. In Venice, for example, it is not particularly nice for the residents to be swamped by millions of tourists, but economically and financially, the city is doing okay. A continent as a whole cannot live as a museum, not with high living standards and certainly not in a way that is appealing for young Europeans to want to stay there.
This is not to say that there are no fantastic things about living in Europe, because there are. And I am not saying that we need to become the United States lock a barrel, but we do need to have much more dynamic economies. The lack of reforms to generate growth, which Mario Draghi recently pointed to (and which European Spring pointed to beforehand), is deeply troubling and ultimately unsustainable.
Find out more about the guest: philippelegrain.com/
Check out the publication discussed in the episode: www.project-syndicate.org/commentary/u…rain-2024-11
This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.
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