Mario Draghi | Power requires Europe to move from confederation to federation.

From its inception, the architecture of the EU embodied the belief that international rule of law, upheld by credible institutions, fosters peace and prosperity.

Since no European state retained the capacity to defend itself alone, our security doctrine was shaped by the protection afforded by America. Together, and always in alliance with the US, we were able to face any threat and deliver peace within Europe.

And with our security guaranteed and trade flowing mainly within that alliance, we could safely pursue economic openness as the basis of our prosperity and influence.

But the now defunct global order did not fail because it was built on illusion.

It delivered real and widely shared gains: for the US, as hegemon, via unquestioned influence in all domains and the privilege of issuing the world's reserve currency; for Europe through deep trade integration and unprecedented stability; and for developing countries through participation in the global economy, lifting billions out of poverty.

The system's failure lies in what it could not correct.

Once China joined the WTO, the boundaries of trade and security began to diverge. We had always traded beyond the alliance, but never before with a country of such scale, and with ambitions to become a separate pole itself.

Global trade drifted away from Ricardo's principle that exchange should follow comparative advantage. Some states pursued absolute advantage through mercantilist strategies, forcing deindustrialisation onto others, while the gains that remained were unequally shared. This sowed the political backlash we now face.

At the same time, deep integration created dependencies that could be abused when not all partners were allies. Interdependence, once seen as a source of mutual restraint, became a source of leverage and control.

Multilateral governance had no mechanism to address imbalances, and no language to acknowledge dependencies. Faith in the mutual gains of trade made the very idea of weaponised dependence unthinkable.

But the collapse of this order is not itself the threat. A world with less trade and weaker rules would be painful, but Europe would adapt. The threat is what replaces it.

We face a US that, at least in its current posture, emphasises the costs it has borne while ignoring the benefits it has reaped. It is imposing tariffs on Europe, threatening our territorial interests, and making clear, for the first time, that it sees European political fragmentation as serving its interests.

We face a China that controls critical nodes in global supply chains and is willing to exploit that leverage: flooding markets, withholding critical inputs, forcing others to bear the cost of its own imbalances.

This is a future in which Europe risks becoming subordinated, divided, and deindustrialised—at once. And a Europe that cannot defend its interests will not preserve its values for long.

The transition from this order to whatever lies next will not be easy for Europe.

We will face a long period in which interdependencies persist even as rivalries intensify. We remain heavily dependent on the US for energy, technology and defence. China supplies over 90% of our rare earth imports, and dominates the global solar and battery value chains that underpin our green transition.

In this period, the best path for Europe is the one it is now pursuing: to conclude trade agreements with like-minded partners that offer diversification, and to deepen our position in supply chains where we are already critical.

This is where Europe has power today. In 2023, the EU was the world's largest exporter and importer of goods and services, with imports from the rest of the world totalling €3.6 trillion. It is also the largest trading partner of more than 70 countries.

And we hold critical positions in several strategic industries. European firms control 100% of extreme ultraviolet lithography, the technology required to make advanced chips. We produce half the world's commercial aircraft. We design the engines that power the vast majority of global shipping.

In this context, it is wrong to think of trade agreements primarily in terms of growth. Their purpose now is strategic: to strengthen our position and realign our relationships now that trade and security no longer fully overlap.

But this is a holding strategy, not a destination.

Individually, most EU countries are not even middle powers capable of navigating this new order by forming coalitions—each bringing distinctive assets to the table, whether raw materials, technological niches or strategic geography.

But collectively, we have something greater: scale, wealth, political culture, and 75 years of building the institutions of a common project.

Of all those now caught between the US and China, Europeans alone have the option to become a genuine power themselves.

So we must decide: do we remain merely a large market, subject to the priorities of others? Or do we take the steps necessary to become one power?

But let us be clear: grouping together small countries does not automatically produce a powerful bloc. This is the logic of confederation—the logic by which Europe still operates in defence, in foreign policy, in fiscal matters.

This model does not produce power. A group of states that coordinates remains a group of states—each with a veto, each with a separate calculus, each vulnerable to being picked off one by one.

Power requires Europe to move from confederation to federation.

Where Europe has federated—on trade, on competition, on the single market, on monetary policy—we are respected as a power and negotiate as one. We see this today in the successful trade agreements being negotiated with India and Latin America.

Where we have not—on defence, on industrial policy, on foreign affairs—we are treated as a loose assembly of middle-sized states, to be divided and dealt with accordingly.

And where trade and security intersect, our strengths cannot protect our weaknesses. A Europe unified on trade but fragmented on defence will find its commercial power leveraged against its security dependence—as is happening now.

Some will say that we should not act until our position is stronger, until we are more unified, until escalation is less costly.

But this trade-off is illusory. It is only by moving that we create the conditions to act more decisively later. Unity does not precede action; it is forged by taking consequential decisions together, by the shared experience and solidarity they create, and by discovering that we can bear the result.

Consider Greenland. The decision to resist rather than accommodate required Europe to carry out a genuine strategic assessment—to map our leverage, identify our tools and think through the consequences of escalation.

The willingness to act forced clarity about the capacity to act.

And by standing together in the face of a direct threat, Europeans discovered a solidarity that had previously seemed out of reach. The shared resolve resonated with the public in ways that no summit communiqué could have achieved.

At the same time, building collective strength will not be the same for Europe as it has been for China, or now looks to be for the US.

The US, in its current posture, seeks dominance together with partnership. China sustains its growth model by exporting its costs onto others. European integration is built differently: not on force, but common will; not on subjugation, but shared benefit.

It is integration without subordination—vastly preferable, but vastly more difficult.

This demands a different approach. I have called it "pragmatic federalism."

Pragmatic, because we must take the steps that are currently possible, with the partners who are currently willing, in the domains where progress can currently be made.

But federalism, because the destination matters. Common action and the mutual trust it creates must eventually become the foundation for institutions with real decision-making power—institutions able to act decisively in all circumstances.

This approach breaks the impasse we face today, and it does so without subordinating anyone. Member states opt in. The door remains open to others, but not to those who would undermine common purpose. We do not have to sacrifice our values to achieve power.

The euro is the most successful example. Those who were willing went ahead, built common institutions with real authority, and through that shared commitment, forged a solidarity deeper than any treaty could have prescribed. And since then, nine more countries have chosen to join.

This will not be a straight path. As Schuman said in 1950, Europe will not be made all at once. Not all countries will join every initiative from the outset, whether in energy, technology, defence, or external policy. But every step must remain anchored in the goal: not looser cooperation, but genuine federation.

Some may delude themselves that the world has not really changed, or that geography makes them immune. Some may believe that surrendering economic independence, or even territory, does not threaten their ability to preserve the values that define us.

That should not stop the more clear-sighted from forging ahead. We are all in the same position of vulnerability, whether we see it yet or not. The old divisions that paralysed us have been overtaken by a common threat.

But threat alone will not sustain us. What began in fear must continue in hope.

As we act together, we will rediscover something that has long been dormant: our pride, our self-confidence, our belief in our own future.

And on that foundation, Europe will be built.

Patron Saint’s Day 2026, Katholieke Universiteit Leuven