The Cercle d'Economia suggests reaching out to China amid Trump's trade war.

Next week, the Cercle d'Economia holds its annual meeting in a climate marked by the trade war unleashed by the US . Hence, the economic lobby's latest opinion piece emphasizes the need for the Old Continent to review its relations with its Atlantic partner . Not only to strengthen European sovereignty in areas such as technology and defense, but also to explore new alliances.

At the presentation of the document, the president and general director of Cercle , Jaume Guardiola and Miquel Nadal , advocated for closer ties with China. "Europe must deepen its relationship with China; it is a key player on the geopolitical stage. Europe must have the most fluid relationship possible with China," they stated. Although the document confirms the European economy's high dependence on Chinese technology, it also points out that the Asian giant is "increasingly" recognizing the European Union as a relevant political player.

Any future Sino-European entente is framed within the disillusionment caused by the early stages of the Trump administration . "We are living in times of grave geopolitical disruption. Donald Trump's second term is characterized by a disdain for multilateralism (…) and for traditional alliances, of which the transatlantic alliance is the principal expression. It is also characterized by the primacy of particular American interests, by a preference for power relations (…), and by rampant economic nationalism, of which the absurd and erratic tariff war is the latest episode," the note reads.

Faced with this situation, the Cercle urges Europe to wake up —hence the wake-up call included in the title of the conference. To a certain extent, the crisis between Russia and the Club of 27 already marked a first milestone. It was then that Europe realized its extreme dependence on Russian hydrocarbons. But the US shift forces a rethinking of EU policies to prevent the Old Continent from losing its role in the international arena.

"Europe must decide what it wants to be. (…) Does it want to be a relevant and respected player, capable of defending its interests, or does it prefer to be a second-tier player that doesn't sit at the table of the major world powers?" the organization asks. The note is a call to action for Europe to loosen its ties with the US and other major powers and improve its positions on strategic issues, incorporating the ideas of the Draghi and Letta reports. Of course, this move will require "compromises." "This is not a do-gooder note," Nadal noted.

The most urgent issue is defense policy . Security and defense, as the Cercle points out. The association calls for a "transfer of sovereignty" to create a common defense policy for all EU member states. This would require a "change in the treaties," as Guardiola has acknowledged. But without this coordination effort and joint commands, it cannot be guaranteed that budgetary resources will be used efficiently.

On the other hand, the Cercle believes that "it would be desirable for the increase in defense spending in Europe to be jointly financed, since the security and defense of the continent are also a European public good."

On a strictly economic level, the association highlights the shortcomings in productivity and cutting-edge technology within the European productive fabric. Recently, the Cercle launched a think tank called IPI (Initiative for Productivity and Innovation) , which aims to improve the competitiveness of eurozone economies. It's not all grievances: the Old Continent continues to account for 17% of global GDP and has, as one of its main assets, a strong internal market with high purchasing power.

Regarding the Green Deal , the note correlates decarbonization with industrial competitiveness. "It is essential (…) to address the competitiveness and distribution consequences of the EU's ambitious climate policy, because much is at stake: the future of a significant portion of European industry and also the acceptance of the European integration project itself." To mitigate the adverse effects of the implementation of clean energy, it proposes financial compensation for the sectors most affected by the replacement of fossil fuels.

All these major objectives aim to give Europe a more robust economy that allows it to speak on equal terms with the US, China, or Russia. They seek, as the document insists, to preserve the welfare model of European democracies. To reconcile all these goals, the Cercle, quoting Draghi, calls for greater "federalization" : "If Europe wants to play in the world's top league, it must understand (...) that the scale of its Member States has never been so small and inadequate in relation to the scale of the challenges we face (...). Therefore, the only possible solution is to deepen the integration process, although perhaps on slightly different foundations."