【Text by Observers Net, Chen Sijia】"The illusion of the EU in 2025 was shattered." According to an August 22 report by the Italian ANSA news agency, Mario Draghi, former president of the European Central Bank and former Prime Minister of Italy, said during a speech that the EU failed to play a significant role in major geopolitical conflicts this year, and also yielded to the tariff pressures from its ally, the United States. This reflects the fact that the "illusion of the EU as a global superpower" has been shattered.

Draghi made these remarks at an event in the northern Italian city of Rimini. He stated that in the recent Israel-Palestine conflict and the conflict between Iran and Israel in June, the EU was merely a "bystander." While the EU provided substantial aid to Ukraine, it only played a "relatively marginal role" in promoting peace talks for Ukraine.

He also pointed out: "We had to yield to the tariff pressures from our largest trading partner and long-term ally, the United States. We were pressured by the U.S. to increase defense spending, perhaps we should have made this decision anyway — but the way and form might not represent Europe's interests."

Draghi believes that a series of events in 2025 reflect a "brutal truth," that the EU can no longer fantasize about being a "global superpower" or think that its economic size alone can bring global influence.

"For years, the EU believed that its economic scale of 450 million consumers brought influence over geopolitics and international trade, but this year will be marked as the year when this illusion disappeared," Draghi said. "These events have shattered the illusion that economic power alone can ensure geopolitical strength. Therefore, it is not surprising that doubts about Europe have reached new heights."

Photo: Former President of the European Central Bank Draghi, Visual China

For years, US President Trump has been urging NATO member states to increase defense spending. At this year's NATO summit in June, NATO members agreed to raise defense spending to 5% of GDP by 2035, with 3.5% allocated for core defense expenditures and an additional 1.5% for broader defense-related measures.

However, CNN noted that some European NATO members are preoccupied with growing massive debt burdens, making it difficult to bear the economic pressure of increased defense spending. Marcel Fratzscher, director of the German Institute for Economic Research, said: "Increasing spending on any project so dramatically, especially in defense, is unprecedented in peacetime."

Analysts believe that European governments have three options to meet the new defense spending targets: cutting other expenses, increasing taxes, or taking on more debt. However, for European countries with heavy debt, these options are either politically unacceptable or simply not feasible in the long run.

Analysts at the European think tank Bruegel wrote in a report: "Many (EU) countries face severe fiscal constraints. It is unrealistic to expect countries that have struggled to meet the 2% defense spending target for decades to accept an unreasonable, higher target."

In addition to the defense spending issue, European countries also face tariff pressures from the Trump administration. On August 21 local time, the United States and the EU officially released the final details of the trade framework agreement. The U.S. will set a 15% tariff cap on most EU goods exported to the U.S., while the EU made significant concessions and commitments under the agreement.

The EU will eliminate tariffs on all U.S. industrial products, providing preferential market access for U.S. seafood and agricultural products. The EU also agreed to purchase $75 billion worth of U.S. energy products within three years, and to purchase at least $40 billion in U.S. artificial intelligence chips for the construction of European data centers. European companies will make an additional $60 billion in investments in U.S. strategic sectors.

Currently, the U.S. maintains a 50% import tariff on steel and aluminum products under the pretext of "national security." This rate was not reduced in the agreement. EU steel companies are concerned that if the 50% tariff remains unchanged for a long time, exports to the U.S. could face further squeezing. Data shows that since the U.S. imposed a 25% tariff on EU steel products in 2018, EU steel exports to the U.S. have dropped from 4.6 million tons annually to 3.8 million tons in 2024.

The Financial Times reported that many European politicians and analysts believe the trade agreement with the U.S. is a "bad outcome," as the EU had to accept higher tariffs than originally planned, while also committing to spend billions on U.S. energy products and investments in the U.S.

In Draghi's view, if the EU wants to enhance its competitiveness and adapt to the new geopolitical landscape, it must seek reform. "Political organizational models, especially supranational models, emerged partly to address the problems of their time. When huge changes occur, making existing organizations vulnerable, they must change."

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