As one of the big economic blocs in the world, the EU is faced with the hard task of reconciling the benefits of international interdependence with its own economic and social priorities. To put it bluntly, the EU and its member states will need to reconcile economic openness with social justice and the ballot box, an exercise that has become increasingly difficult with time as the number of losers at home has grown…

A major task of the EU in the years to come will be to help member governments find a better modus vivendi between global markets and domestic social contracts. This is absolutely crucial although not widely understood. Economic interdependence can and should proceed faster between countries with compatible economic structures and priorities. But given Europe’s close integration into the world economic system, it would make little sense for Europeans to turn economic interdependence into a weapon to be used in a political and ideological war with China. Europeans will have good reasons to view their relations with China differently from the United States.

The competition and regulatory arms of the European Commission regarding new technologies have been put to good use. But the key question remains whether European companies will be able to play global championship games in the future, instead of the Commission just trying to referee games played by others. Continued technological dependence on companies, and indirectly also on governments, beyond Europe’s borders would severely reduce the capacity of Europeans to define independently their interests and defend their freedoms and way of life. To avoid this, Europe will need to complement an effective competition policy with industrial strategies fit for purpose in the new technological era, and try to reconcile the two. The key priority for Europeans should be to think strategically and collectively. They should invest in a big way in innovation and help mobilize large amounts of resources. They will also need institutions that think outside the box.

Because of its long-accumulated experience of cooperation and compromise, Europe would be ideally suited to trying to inject a healthy dose of reason and moderation into the management of global interdependence. This could apply to the design of new and better multilateral rules and institutions to govern international economic exchange. It could also apply to the greening of the global economy, with Europe playing a leading role in the creation of an international climate club that will combine incentives and sanctions to achieve this crucial goal for humankind. The European model has indeed valuable things to export to the rest of the world. Instead of imperial conquests in which they specialized in the past, Europeans might try instead to export the logic of cooperation and the defence of global commons. It would be a most welcome change.

Such arguments should apply even more to broader issues of peace and security. In a world in transition, with growing strategic rivalry and rising nationalism, Europe can be the quiet power that does not think and act in Manichean terms, is patient with negotiations, acts in moderation and seeks compromise solutions. But let us have no illusions. The force of persuasion of a European Venus will depend not only on her beauty and the intrinsic value of her arguments. It will also crucially depend on the kind of power she can project. Such power will need to include trade instruments, economic sanctions, and military weapons as the ultimate means of persuasion. Europe needs credible means to defend its interests and values.

This is an exclusive excerpt of Loukas Tsoukalis’ new book ‘Europe’s Coming of Age’