We can only conclude that they either haven't thought it through when they passed the Digital Services Act, or they did think it through, and wanted to imposes outright censorship. It is the classic case of either stupid or evil. 

The EU shot back at Mark Zuckerberg yesterday with a claim that nothing in the EU legislation would force the company to delete legal content. This statement, too, is either a devious lie or a stupidity. Anyone who has ever dealt with editorial content on a professional level knows about trade-offs. Libel and defamation laws impose a high legal burden of verification on journalists and editors. There are clear true stories that simply cannot be told when an investigation does not meet the required level of proof. We support these laws because it is important to protect people against media mobbing campaigns. But it is naïve to think that there is clear blue water between the truth and the lie. Philosophers have, mostly unsuccessfully, struggled with this question of what constitutes truth. The people who drew up the legislation, and who passed in the Council and the Parliament, are not in the league of Descartes. They don't know that they don't know.

With Greenland, Europe is running into a geopolitical disaster largely of its own making. It would have cost almost nothing for the EU to have made Greenland - and Iceland - an offer for membership, in return of which the EU would have obtained a foothold in one of the strategically most important regions.

It's long forgotten, but Greenland was a member of the EU once when it was part of Denmark. With the departure of Greenland and the UK, the EU lost its two most northern Atlantic members. People tend to forget that neither Finland nor Sweden have access to the Arctic coastline. 

Greenland formally withdrew from the EU in 1985. Today, Greenland is still part part of the Danish crown, but the 2009 autonomy acts give Greenland the right to secession through a referendum. So the statement by Mette Frederiksen, the Danish prime minister, that Greenland is not for sale is bunk. This is up to the seller. The seller is not Denmark, but the 59,000 inhabitants of Greenland. Neither Denmark nor the EU can stop this. 

Last year, Ursula von der Leyen and Frederiksen visited Greenland because they were alarmed by plans of Chinese investment in Greenlandic mining. Greenland has reservoirs of natural resources including rare earth metals - a market China is keen to dominate because of its importance for batteries and other high-tech equipment. The Greenland prime minister, Múte Bourup Egede, told them bluntly that Greenland is a poor country that welcomed foreign investment, including from China. After treating Greenland with contempt and neglect for so long, it is unsurprising that the country prioritises its narrow economic interests over European security concerns. And this, we think, is how Donald Trump might get them. 

In 2009, Iceland considered joining the EU, which would have been a strategic coup for the EU, because it could have paved the way of Greenlandic accession. But the Iceland accession failed over fishing rights. It is astonishing how much political capital the EU has spent on this subject. The EU and Greenland only have a friendship treaty, with some tuppence worth of support for sustainable development. Iceland's new government is planning on holding a referendum on EU membership by 2027. 

The Arctic has become geostrategically increasingly important. Russia is the Arctic superpower. The region also hold economically because of raw materials and because melting sea ice could open up new trade routes. It is also unsurprising that Trumps prioritises the acquisition of Greenland, Canada, and the Panama canal, using the language of mergers and acquisitions.

It should also come as a reminder that the US does not share Europe's priority of Ukraine as its number one geopolitical issue of our time. For Trump, the security policy priority is to push back China away from the US's own geographic neighbourhood, and to secure a strong presence in supplies of critical raw materials. 

We are where we are because the EU ended it path towards political integration with the introduction of the euro, deluding itself into believing that soft power, diplomatic grand-standing, and control over regulation would prevail in the end. 

Despite the war in Ukraine and western sanctions, Russia’s oil industry has continued to work, and earn revenue for the Kremlin. Russian crude oil typically trades at a discount to global benchmark prices. But exports have continued, and a price cap imposed by the G7 has been ineffective: Russian crude oil is frequently sold above this notional $60 a barrel limit. The share of government revenues that comes from oil has gone down recently. But, as of 2025, the Russian finance ministry still expects more than a quarter of its income to derive from oil sales.

But what if that did change? Reuters has reported that the Biden administration, in one of its parting acts, is considering a major new sanctions packages targeting Russia’s so-called shadow fleet. These are mostly ageing vessels that defy sanctions to transport Russian oil around the world. One official quoted by Reuters said that the sanctions could target more than 100 ships. Estimates vary as to the size of the shadow fleet, but they are generally in the mid-to high hundreds, so this would be a significant proportion of the fleet itself.

We don’t know if the sanctions will come into force yet, or exactly what they will look like. But it is worth considering what would happen if Joe Biden’s administration did pass materially significant sanctions on Russian oil in the waning days of his presidency.

First, it would be safe to assume that any sanctions which meaningfully dented Russia’s oil revenue would constitute quite a large supply shock. This has been one reason for holding off of more severe sanctions in the past. Russia is one of the world’s largest oil producers. In October, for instance, it shipped 3.74m barrels per day of crude oil. By comparison, the International Energy Agency’s expectation is that next year, we will see a 950,000 barrel per day global oil surplus. A large change in the volume of crude oil Russia sends out would make quite a significant difference at the margins, though other Opec+ producers have enough spare capacity to cover this off.

It would also be interesting to see what Donald Trump would do in office. Any sanctions Biden can get through so quickly would have to be done via executive order. This means Trump could, presumably, undo the sanctions about as quickly as Biden put them in place. Of course, undoing already existing sanctions is a different story from avoiding them in the first place.

Or, if they really are effective, Trump could try to keep them where they are as a bargaining chip. This may produce an ironic turn of events. The US could be keener on sanctioning Russian oil to increase leverage for a peace agreement. At the same time, more pro-Russia governments in the EU, including another potential one in Austria, might block renewed sanctions against Russia. The next deadline for a decision on renewing EU sanctions is supposed to come at the end of January.    

The UK and Germany have something in common. Their governments are both under relentless attack by Elon Musk, who succeeded to turn his entire social media platform into a political campaigning machine against government policies. Olaf Scholz and Sir Keir Starmer are both conflicted about how to deal with this because they both need to work with Donald Trump.

Over the holidays, we sampled opinion amongst mostly informed friends about how long the Trump-Musk relationship will last. The consensus has been not very long. Someone predicted it will be over by March. It is clearly not difficult to imagine a scenario where the two would fall out in some giant explosion. Musk's support of Nigel Farage ended abruptly over the weekend. It is a volatile world out there on the right.

Smart investors have known it forever that hedging against tail risks is a better strategy than betting on specific outcomes. We ourselves take a similar tail-risk view in our analysis of geopolitics. From a, say centrist European perspective, the tail risk is clearly that the Trump-Musk axis will hold, and that Musk will keep using his platform X to advocate policies of the right for the foreseeable future.

His campaign to expose UK government policies on grooming gangs is already causing massive reputational damage to the Labour Party. His endorsement for the AfD in Germany has led to a small, but notable increase in the party's poll rating. Alice Weidel, the party's co-leader is about to get personal air time with Musk. After the 2016 elections, Trump also tried to influence public opinion in Europe, but much less effectively through characters like Steve Bannon or Richard Grenell, the former US ambassador to Germany. This had a certain clownish feel to it. The two were not nearly as effective as Musk is today.

The Europeans have not got anything to set against it. We keep hearing from an outraged Thierry Breton, the former French industry commissioner, that the EU should use his digital services act to hold Musk responsible. But the EU won't do this. Academics, journalists and media organisation, many of whom support the centre-left, have left X in disgust and sought refuge in another platform where they can talk mostly to each other. TikTok is also a platform that is mostly skewed to the right - not because of its Chinese owner, but because the right has proven more adapt at exploiting it.

The influence of the mainstream media is waning everywhere, including in Europe, albeit to different degrees. Young people are less inclined to read newspapers, and the market for paid content is much more varied than it used to be. The EU did not have a strategy of how to respond to Trump's election victory. They certain do not have a strategy of how to deal with Musk.

The UK and Germany have something in common. Their governments are both under relentless attack by Elon Musk, who succeeded to turn his entire social media platform into a political campaigning machine against government policies. Olaf Scholz and Sir Keir Starmer are both conflicted about how to deal with this because they both need to work with Donald Trump.

Over the holidays, we sampled opinion amongst mostly informed friends about how long the Trump-Musk relationship will last. The consensus has been not very long. Someone predicted it will be over by March. It is clearly not difficult to imagine a scenario where the two would fall out in some giant explosion. Musk's support of Nigel Farage ended abruptly over the weekend. It is a volatile world out there on the right.

Smart investors have known it forever that hedging against tail risks is a better strategy than betting on specific outcomes. We ourselves take a similar tail-risk view in our analysis of geopolitics. From a, say centrist European perspective, the tail risk is clearly that the Trump-Musk axis will hold, and that Musk will keep using his platform X to advocate policies of the right for the foreseeable future.

His campaign to expose UK government policies on grooming gangs is already causing massive reputational damage to the Labour Party. His endorsement for the AfD in Germany has led to a small, but notable increase in the party's poll rating. Alice Weidel, the party's co-leader is about to get personal air time with Musk. After the 2016 elections, Trump also tried to influence public opinion in Europe, but much less effectively through characters like Steve Bannon or Richard Grenell, the former US ambassador to Germany. This had a certain clownish feel to it. The two were not nearly as effective as Musk is today.

The Europeans have not got anything to set against it. We keep hearing from an outraged Thierry Breton, the former French industry commissioner, that the EU should use his digital services act to hold Musk responsible. But the EU won't do this. Academics, journalists and media organisation, many of whom support the centre-left, have left X in disgust and sought refuge in another platform where they can talk mostly to each other. TikTok is also a platform that is mostly skewed to the right - not because of its Chinese owner, but because the right has proven more adapt at exploiting it.

The influence of the mainstream media is waning everywhere, including in Europe, albeit to different degrees. Young people are less inclined to read newspapers, and the market for paid content is much more varied than it used to be. The EU did not have a strategy of how to respond to Trump's election victory. They certain do not have a strategy of how to deal with Musk.

As the last working week of 2024 draws to close, one would be forgiven that the western world has turned officially crazy. We are at the brink of a government shutdown in Washington. Elon Musk is now officially supporting the AfD in the German elections. Olaf Scholz walked into the European Council to press for what he believes to be the key to the future of the European economy: EU-coordinated subsidies for the car and steel industries. Viktor Orbán has rejected the renewal of the EU’s Russia’s sanctions, which auto-expire at the end of January. And Kaja Kallas, the EU’s High Representative for foreign and security policy, warns against a peace deal in Ukraine. We write about France in a separate story, but what happens there complements this picture. Whom the gods would destroy, they first make mad.

We are not in the business of predictions. But there are three themes, we want to focus on in this story. More themes are in our next stories below. 

The first theme is on German politics. It is a mug’s game to speculate on what coalition will emerge after the German elections. But we can say that Friedrich Merz will most likely be the next chancellor.

We would expect him to perform better than Olaf Scholz and be more effective on the global stage. But whatever coalition permutation will emerge in Germany, it will not address the causes of Germany’s decline – clinging on to 20th century technologies, mindsets, and work practices. German coalition politics is like a game of musical chairs: Four party groups compete for three chairs. This is a political system hardwired to deliver continuity.

Much of the hardwiring is constitutional. The German constitution started off in 1949 as a lean, minimalist framework, but like the rest of German laws and regulations, it, too, has become cluttered over the years. It has been amended 67 times until the end of 2022, and then again this week to lower the majority threshold for the appointment of judges. One of these 67 changes is the infamous debt brake. The constitution as it is today lies at the centre of the legal/political doom loop in which Germany is trapped. A reform here, and another one there, is not going to fix Germany. This is not 2003.

Our second theme is related to the first - the malaise of the car and steel industries. We think it will get worse. We heard stories this morning that VW was close to a deal with its workers. What sounds like good news at first, is nothing of the kind. The company reportedly agreed to abandon plans to close three factories, and to extend job guarantees for another five years. The unions agree to moderate their wage demands. This is a deal from the playbook of the Schröder era. It won't fix the company's massive cost overrun problems. We should recall, VW is partly a state-owned company, one that is protected against a hostile takeover by a golden share. Germany will refuse to accept decline of this industry, and stem against the inevitable with subsidies and, if necessary, state ownership. For those with a long enough memory, this is the British Leyland model of the 1970s – and we all know where that ended up.

In Europe, we associate the problem of the car industry with Germany. Stellantis – the company that owns Peugeot and Fiat amongst others - appeared at one point to have been in better shape due but that turned out to have an optical illusion. We also noted that GM's sales’ in China are down by 42.5% in the first 11 months of the year. The decline of the car industry is a western thing. The reason for this decline is our failure to keep up with technology, and to regulate ourselves to death. China makes technological superior cars and is ahead of us in batteries and software. The car and steel industries that Scholz wants to subsidise are symptomatic of the decline of Europe’s social model that has been a defining characteristic of the EU itself. It is no surprise therefore that the EU is becoming dysfunctional.

Our third theme is fuzzier. Scholz yesterday held his second telephone call with Donald Trump and walked away with the strong impression that the next president will enforce a peace deal. There is still a lot that can go wrong, but on this point, we are moderately more optimistic than on the points raised above. It makes a difference that both sides of the war appear ready to talk and make sacrifices. Kallas and other delusional armchair warriors still believe in victory. The reality is that neither side in this car has the military capacity to achieve its stated war goals. Russia’s recent military successes are for real, but we do not count its progress in terms of dozens of miles, but tens of metres. What is clear is that when the war ends, it will get very expensive for us Europeans.

Herein lies the only prediction we are ready to make. No matter what our national and European fiscal rules may say, this decade is going to get expensive.

Emmanuel Macron came to power in 2017 with a new political offer to make France's traditional parties redundant and to marginalise the far-right. Seven years later, he now relies on those traditional parties to build a coalition government, with the far-right as the largest party in his National Assembly. Instead of the president, it is now those parties that dictate the political future of the country. And it is Marine Le Pen who still has the say over whether his government can survive or not. Macron seem to have come full circle.

The fate of Macron depends on what happens with Francois Bayrou. If Bayrou fails, France will be on the brink of a constitutional crisis. The country is in a situation similar to the end of the Fourth Republic, when political instability was the result of parties dominating the scene with their improvisations and partisan bargaining. It is the reason why the Fifth Republic gave so much more power to the president. And yet even despite, or maybe because of, the president’s extensive powers, France finds itself in the same situation again.

There are still many unknowns of what to expect in 2025. What we know, however, is not very encouraging. Bayrou wanted to enlarge the majority, but he ended up with the same crowd as Michel Barnier. He promised to break the political deadlock with a new method but the only concrete proposals he put forward promise more deadlock instead.

Will there be a government before Christmas? Yesterday, Bayrou presented his idea of negotiating a new pension reform over nine months in the new year. He insists, however, that as long as a new pension reform has not been found, the old one would remain valid. This way he pleased Les Républicains on the right, but alienated the Socialists. So he ends up where Barnier left off, with the conservatives ready to join a government and the left opting out. If Bayrou cannot include personalities in his government who appeal to the left, the idea that he can enlarge the majority is clearly dead.

Bayrou also rejected the idea of foregoing the use of Art. 49.3 to push the budget through without a vote in parliament. He may now have neither the Greens nor the Socialists ready to support him with a no-censureship agreement in parliament. MPs are already wishing back Barnier, even those who ousted him in the censure vote. Will the mood shift in the new year? Nothing is more uncertain.

Without a no-censure deal on the left, Bayrou’s future is once again in the hands of Marine Le Pen. Bayrou promised to deliver on one of their key demands, to introduce proportionality before the next legislative elections. Bayrou’s assurance is why the Rassemblement National cooled on the idea of a censure motion. But he still has to deliver this, to escape Le Pen’s clutches. Proportionality though is strongly opposed by the only party that is still interested in joining him in government, Les Républicains.

Proportionality is also not a solution to the current impasse. If the last election would have been held with a system and proportionality similar to how senators are elected, as the RN suggests, the assembly would still have three blocs and no clear majority. A simulation by the Jean Jaurés foundation applied the Senate system to the assembly. This would result in 80% of the MPs being elected via proportionality voting. As to be expected the RN would be the main beneficiary, winning 39 seats more than they currently have. The Macronist group would be the biggest loser with 28 fewer seats. Even the left alliance would lose some 17 seats. Les Républicains, the opponents to proportionality, would also be amongst the winners, with six additional seats.

Looking ahead at 2025, there are clear markers in the calendar. Bayrou’s political agenda is to be presented mid-January and the budget in February. So this means no censure motion until then. From then onwards there are a couple of scenarios.

If Bayrou presents the budget say mid-February, the parliament has 70 days to examine and vote on the texts. If this process goes through all to the end, without Bayrou triggering 49.3 before, we are approaching end of April.

It looks inevitable that Bayrou will have to trigger 49.3 eventually, like Barnier and every prime minister since Macron lost his majority in the 2022 elections. The contradicting nature of the parties’ demands has not changed, neither the power relations. There is thus little chance that parliament adopts a budget that Bayrou is ready to implement. The only question is when 49.3 will be triggered. What follows is also clear. Once Bayrou triggers 49.3, we can be sure that the LFI will present its censure motion. Will there be a majority ready to topple Bayrou?

If Bayrou manages to get a no censure deal together in time he may live for another day. This is the best case scenario, where uncertainty about the budget and the government would last until May. In this scenario the next challenge for Bayrou would then be whether he can deliver any meaningful reform and provide the country with a stable economic outlook.

The worst case scenario is if Bayrou gets censured. We assume for now that this will happen only after Bayrou triggered 49.3. Under the current calendar, this would be April or May at the latest. With Bayrou gone, the chances that anyone can survive as prime minister diminish rapidly. New legislative elections can be called for July at the earliest. So in this scenario, it would add another two months of caretaker government where no decisive measures can be taken. And there is no guarantee that the next assembly gets a clear majority. So parties may have to continue to practice the art of compromise.

We do not see Macron resigning any time soon. But with new legislative elections, parties could campaign with a promise to end the Fifth Republic. If those parties were to win those elections, pressures on Macron would increase significantly. Another source of pressure comes from the business community. Aghast by his spontaneous decision to dissolve the assembly, many business leaders lost their trust in Macron’s leadership. Investments are put on hold and relocation plans are drawn up. Internationally, Macron may be the European leader Donald Trump turns to once he is in the White House. That could give him some leverage in Europe and at home. We also expect Macron to fight for his legacy. He has two more years to straiten his accounts with the French people and he plans to use those. But if his ambitions and the fate of his country continue to be at loggerheads, eventually the question arises whether there is a general interest that supersedes his personal ones.

Back in September, Mario Draghi warned that the EU risked fading into irrelevance in the 21st century. If you visit Tallinn, Estonia’s capital, nothing could feel further from the truth. Beyond the mediaeval old town, you have an ultra-modern cityscape, with offices populated by start-ups. Some of the best-known high-tech names in Europe, like Skype or Wise, originally hail from Estonia, a country with fewer than 1.4m inhabitants. The country is currently in a recession, but it is one that seems more cyclical than structural, with a return to growth expected by the European Commission next year.

Like Estonia, most of Europe’s current winners are small countries. Ireland has carved out a successful niche as a gateway for multinational, and especially American, firms into Europe. Like Estonia, it is a beneficiary of the tech industry. Denmark has one of the EU’s fastest-growing economies, thanks to the runaway success of Novo Nordisk, the pharmaceutical firm that developed the Ozempic weight-loss drug. Sweden, another country with a relatively successful tech sector, is a bit bigger than Ireland and Denmark, and especially than Estonia, but still small in the grander scheme of things.

In comparison, Europe’s large economies have struggled. Germany’s growth is flatlining, and its industry-based model is in existential danger. France’s growth is set to come in below 1% this year, and it faces a debt crisis. After an initially strong rebound, Italy’s growth will probably come in low too, maybe even as low as 0.5%, according to the Banca d’Italia. The UK had a decent beginning of the year, but now it is stuck in the low-growth cycle too. British wages also risk continuing stagnation, a trend from the pre-Covid era.

The bright spots amongst the larger European countries are Spain and Poland. But these are more like special cases. Spain’s economic growth has mostly been due to employment and population growth, thanks to immigration. Its ability to integrate newcomers is laudable, but there’s little sign of any productivity improvements. Poland is a genuine success story, but it is further from the productivity frontier than its western European counterparts. Its output per hour worked, adjusted for purchasing power parity, is still well behind the likes of France and Germany.

What all five of these countries share in common is a degree of political turmoil too. France’s government fell apart when it tried, and failed, to pass a budget. The same happened to Germany, which will go to snap elections for the first time in its post-war history. The UK looks calm on the surface, but the rise of Nigel Farage’s Reform party has upset the balance of power. Spain and Poland both have highly polarised politics, which often end up involving the judiciary. Italy is experiencing a rare period of political stability, but this may change if low growth becomes persistent.

Initially, these countries seem to have quite different economies, issues, and political systems. But the one thing they do share is size, and that seems to be making life complicated for all of them. Unlike their smaller counterparts, finding political consensus is difficult. They also cannot exploit economic models that rely on having much larger and open neighbours easily, like Ireland and Estonia, or benefit from one super-company, like Denmark. Some proponents of Brexit in the UK talked about turning the country into Singapore-on-Thames. The most obvious flaw was that Singapore’s population is less than a tenth the size of the UK.

But these countries also aren’t big enough to insulate themselves from global economic or political intrusions, or shape them individually. Building strong and deep capital markets, like the US, to help produce big but innovative firms is easier if you are already a very big country. So is funding a military large enough to protect not just yourselves, but allies. China could dominate both the solar and electric car industries in part because its large internal market proved a great proving ground for new firms.

Next year, the fortunes of Europe’s larger countries might ebb and flow. But we do expect the malaise to be consistent. None of these countries appear intent on making the reforms to the EU necessary to overcome these problems either. Like the big countries that hold most of the power in the union, it also seems stuck in limbo.

The post-war funding for Ukraine constitutes a potential fiscal shock for European countries they have not budgeted for. Nor have they budgeted for US demands for another 1pp increase in defence spending as a proportion of GDP. Here are some numbers for Ukraine.

If you include debt servicing costs, Ukraine will have a public sector deficit of 28.6% of GDP. The funding gap for next year is $53.8bn, of which $38.4bn accrues to the US and the Europeans. The west has no budgets for this. It has taken a $50bn chunk out of the Russian foreign currency reserves, not the reserves themselves but the earnings. It is interesting, and maybe symptomatic of the state of Ukraine war reporting, that it fails to draw any connections between the peace process and the status of those reserves. There is no way that we get any deal with Russia and at the same time fund the reconstruction of Ukraine through Russian reserves. The Russian reserves consist of money European countries paid to Russia for oil and gas.

The real-world choice will be between confiscating these reserves, and funding an ongoing war, or ending the war and returning the reserves. It is important that we start bifurcating those two scenarios. 

The German budget has no allocations for any Ukrainian assistance beyond the military deliveries that have already been hard-coded into the budget. France, Italy and the UK have no fiscal space. Western promises to Ukraine are based on non-existing financial resources - except for the Russian reserve funds. But once we raid them, we ourselves would be in a war with Russia. 

Russia will also insist on an ending on the sanctions regime as part of any peace deal. It is possible that a deal is agreed in which the sanctions are phased out, pending compliance with agreement, or that reserves may be unfrozen in stages. But we struggle to see Vladimir Putin agreeing to a deal in which he funds the reconstruction of western Ukraine when the war is proceeding well militarily. He, too, cannot fund a permanent war, and has an interest in a settlement eventually. If we are serious about a deal, we will have to start thinking about how to fund Ukraine's future in earnest.

As our side of the Eurasian continent is mired in war, the other side is preparing for war. China held the largest military exercises yet in the Taiwan Strait, with 100 ships and 50 military aircraft, which had the effect of a two-day shutdown of civilian air traffic. Handelsblatt notes that the exercise should serve as a warning that the conflict over Taiwan could escalate at any time. We see it as yet another geopolitical conflict we Europeans are underestimating. And the way we underestimate it is by not preparing for it. When your geopolitical experts are predicting that a hot conflict might still be five years away, this usually translates in a response of no-action by politicians who horizons are much shorter. Even the threat of trade tariffs by Donald Trump, which are as real and concrete as it can get, has so far not had any noticeable impact on wider European politics.

If the US goes to war with China, it would not insist on Europe’s active participation. But it would insist that Europe joins in economic sanctions. Right now, Europe is not in a position to do that because its economy is too interwoven with that of China. You don’t see it in the trade data. The problem is not the exports, but the supply chain dependencies that takes years to unravel. China has progressed much further down that path, by order of President Xi Jinping himself, who prioritised supply chain independence in view of a potential upcoming conflict. A Trump presidency might be the ideal moment for a Taiwan blockade. Trump has given mixed signals on whether or not he would protect Taiwan.

It is understandable that Europeans are preoccupied with conflicts nearer to home, but this is one they need to prepare for. For starters, we should discourage European companies from raising their exposure to China even more, as Volkswagen and BASF are currently doing. We have been reading a lot of smug German newspaper headlines about companies ignoring politics, and expanding into China. An easy way to stop this would be for the German government to withdraw the Hermes export credit insurance. German industry lives in a full-insurance bubble that protects them against geopolitical risk. The first step should be to establish a market for geopolitical risk. Preparations for a US-China standoff should be a priority, not because it is about to happen, but because it takes a long time to create the conditions for Europe to be independent of China, if that's the political choice it wants to make.