9.3
8.524 reviews
English
EN
This article has been automatically translated from Dutch. Click here to see the orginal article including all links to sources.
The global order is under pressure and 2026 began with major geopolitical shocks. How are Europe’s leaders responding? Strong statements were heard: the US would be destroying the world order and engaging in new colonialism. One European leader did not go along with this and even predicted the EU would collapse on its own. Finally, we look at a recession indicator with a remarkably strong historical track record.
You have undoubtedly read that the United States have captured the leader of Venezuela and seized a Russian tanker. Trump once again made clear he has territorial ambitions regarding Greenland. All signs of an era of sweeping changes and geopolitical shifts. The world order is being redrawn at high speed.
Donald Trump (source: Gage Skidmore)
In the Christmas special with Sander Boon and Frank Knopers, we already explored the rise of a new multipolar world order. It became clear that current European leaders are still clinging to the world of yesterday. In response to this week’s events, several European leaders made strong statements. Let’s use those statements to take stock of Europe’s current position. What do their words say about the position and future of the EU in a world order that is changing rapidly?
German President Steinmeier said this week that America is destroying the world order. He warned that we must not stand by passively while the world order established after the Second World War continues to fall apart. He sees that the loss of respect for international law is far advanced, pointing specifically to the US, Germany’s most important partner, a country that helped build the post-war world order.
Steinmeier fears a future in which countries and entire regions are treated as the property of a few major powers. He wants to prevent the world from turning into a “den of thieves where the most unscrupulous take what they want” and where “small and weaker states are left defenceless.” He called on Germany not to be weak.
Weakness is exactly what Germany is struggling with. Earlier this week, German Chancellor Friedrich Merz said that parts of the German economy are in a “very critical” situation, referring specifically to the German car industry. His economic advisers recently downgraded their growth forecast for 2026 to below 1%. The IMF warned that Germany needs sweeping reforms to flourish again.
The chart above from Robin Brooks shows that German GDP in the third quarter of 2025 was nine percent below the pre-COVID trend line. This is a larger divergence than was visible after the global financial crisis on a comparable timeline. Germany is currently the only region where the gap is even larger than it was back then.
Trump and his administration have not taken Germany particularly seriously for a long time. You may remember Trump’s speech at the United Nations in September. In that same week, thousands of jobs were cut in the German car industry. Trump described Europe’s energy policy as suicidal and said: “If you don’t break free from the green energy delusion, your country will go under.”
Chris Wright, the American Secretary of Energy, doubled down this week. He said that Germany has become an expert at driving out industry and called Berlin’s energy policy “the greatest malinvestment in human history.”
Macron made similar remarks to Steinmeier on Thursday in a speech for French ambassadors. According to Politico, the French president warned that the “might-is-right mentality” is returning and that the world is again being carved into spheres of influence. “We live in a world of great powers where there is a real temptation to divide the world,” he said.
Macron accused major powers of behaving like predators, referring specifically to the Western hemisphere being dominated by the US under the so-called Monroe Doctrine. Macron said that Europe must refuse to accept what he called “new colonialism.” He stressed that Europe needs more strategic autonomy and must become less dependent on both China and the United States. He pointed to the need for reduced reliance on both China and the United States.
Not every EU leader responded the same way. Viktor Orbán gave a speech this week that made clear he has a different view of the future. He wants Hungary to maintain strong relations with all major global power blocs, including the United States, Russia and China. He said that the more strong relations Hungary maintains, the better that is for the Hungarian people.
This may explain why he stayed mostly on the surface in his remarks on Venezuela and refused to sign the joint EU statement, making him the only EU leader not to sign. Shortly after, Donald Trump publicly endorsed Orbán and wished him success in his upcoming election campaign.
On the future of the EU he was clear: “Hungary is a sovereign Hungarian nation. We reject Brussels’ push toward a United States of Europe. The EU functions best when member states are strong, not when uniformity is imposed from above.”
Orbán also said that EU leaders have become war-driven and that European Council meetings have turned into “war councils.” He said that in 2026, Europe will see increasing public resistance against what he calls a Western European elite pushing for war and conflict. He sees no future in a war economy, but in an economy of peace and stability.
Orbán also warned that Europe’s democracy is declining. He said that in Europe, elections are rerun, parties are surveilled, candidates are blocked and politicians are punished for defending borders. He said that freedom of speech is being restricted, and that EU leaders use geopolitical crises to push through changes where other interests are also at play.
Orbán contrasted this with his own view: “Hungary chooses competition over bans and sovereignty over centralised control. That’s what democracy looks like.”
Orbán is not planning to lead Hungary out of the EU. He clearly sees a future inside the EU, but that future should not be federal, but a cooperation between sovereign nations. Orbán predicted this week that the European Union would “fall apart on its own” due to “leadership chaos.” To be continued!
Almost no one expects a recession in the US this year. But according to Albert Edwards, economist and market strategist at Société Générale, that consensus may be misplaced. A recession indicator with, in his words, a “100% track record of success” is signalling something very different.
The chart above shows the US unemployment rate in red, with the 3-year moving average shown as a dotted trend line. Since 1950, there have been eight cases where a recession followed after unemployment entered an upward trend and broke above its 3-year average. Edwards believes that a recession is the biggest threat to equities this year.
Another chart above from Charlie Bilello shows the difference between job vacancies and unemployed workers. US job openings fell in November by 303,000 to 7.15 million. This was well below expectations and the lowest level since December 2020. The ratio between job vacancies and unemployed workers dropped to 0.91. There are now 685,000 more unemployed workers than vacancies. Excluding the COVID period, this is the largest gap since 2017.
Edwards said that a recession signal does not mean a recession is guaranteed. But he warned: “This time may be different, but you’d better have a damn good reason to ignore it.”
