The European Counterweight

The EU faces two structural problems: growth far lower than outside the continent, and social welfare built for retirees that burdens the younger generation. Immigration, debt, and infrastructure all stem from these two issues. Worse, America is dissatisfied with Europe's contribution to containing China.

To respond, the EU is diversifying partners. The EU-Mercosur trade deal — twenty years in the making — is just the beginning. At the EU-India summit in New Delhi, they signed a free-trade pact: Mother of all trade deals. Both sides share a goal of diversifying away from their secondary positions in Euro-Atlantic and Indo-Pacific regions respectively.

Indian private sector interest in EU partners for AI and Space could counter both superpowers' ambitions. Yet the immediate impact remains limited — EU trade with the US and China is still six times larger. Modi maintaining ties with Russia continues to annoy Europe. A lot still needs to be settled.