Opinion & Analysis

Strategic interdependence: Europe’s new approach in a world of middle powers


  • The world is changing – and European governments are struggling to decide how to position themselves within it.
  • Middle powers outside Europe are preparing for a fragmented, not a bipolar world, and approaching the emerging order with some confidence. The EU can learn a great deal from their strategies.
  • The EU has a myriad of interdependencies with other powers and will never be totally self-sufficient. To protect its interests and values, it needs a foreign policy strategy that acknowledges this: strategic interdependence.
  • The EU should anchor this approach in an understanding of where it needs partnerships – and the potential power it wields within them.
  • It should prepare for political coexistence and competition, privilege de-risking over decoupling, and invest in key relationships rather than in defending the old order.

The post-cold war order is dying. But the new order has not yet been born.

The growing geopolitical competition between the United States and China has inspired many to imagine that a new cold war will soon structure the emerging world order. According to that vision, the competition between two nuclear superpowers across every domain will in essence determine the global order. US president Joe Biden’s effort to divide the world into democracies and autocracies betrays an instinct to fight the current global struggle much like the last. A consequence of this could be a great decoupling that marks an end to the economic interdependence between China and the US, which could then become the patrons of two blocs defined by ideology.

Both the US and China assume that in such a global order, Europe would neatly align with the US as part of the West. But it is for Europeans to determine their own strategy.

During the long years of the cold war, most countries had little choice but to align themselves with one bloc or the other. Even those countries that managed not to choose sides nevertheless defined their identity in reference to this central struggle of the cold war, forming a “non-aligned movement”.

But today’s world is not the one of 1945. A new cold war, or for that matter, an actual war, is a possibility, but it is not a global destiny. Today’s superpowers, as powerful as they are, lack the level of dominance that the US and the Soviet Union had achieved at the dawn of the cold war. In 1950, the US and its major allies (NATO countries, Australia, and Japan) and the communist world (the Soviet Union, China, and the Eastern Bloc) together accounted for 88 per cent of global GDP. Today, these groups of countries combined account for only 57 per cent of global GDP and are all having to compete with new players in emerging fields of power such as tech and climate. Non-aligned countries’ defence expenditures were negligible as late as the 1960s (about 1 per cent of the global total), but now they are at 15 per cent and growing quickly. In regions in which the US and China have long invested to build up strategic relationships – including the Middle East, Africa, and Latin America – neither player is able to assert unequivocal dominance.

Moreover, neither China nor the US has the type of inspiring ideology that in the cold war helped move elites and publics throughout the world into strict alignment. China today merges a communist ideology with many capitalist elements in its economy. Meanwhile, the traditional American vision of liberal democracy as a universal value has been tarnished by the abuses of the unipolar era, particularly the Iraq war, and by the autocratic excesses of the Donald Trump presidency. China and the US are engaged in a contest for geopolitical supremacy and are willing to use all tools available to that end. But, without an ideology to define and bind the blocs, countries can more easily operate without aligning themselves to one of these patrons.

The competition between a Chinese-led bloc and an US-led bloc will therefore not define the emerging world order. A new class of middle powers has much more agency than they had during the cold war. These countries are engaged in acquiring their own influence in international affairs and are willing to leverage US-China competition to their advantage or, in many cases, challenge it. Their decisions on their relationships with the superpowers, and with each other, will largely determine where the new world order lands on the spectrum from bipolarity to fragmentation. If collectively these powers choose to align with one or the other superpower, then we may indeed have a new bipolar confrontation. If they opt instead for more promiscuous strategies that seek to avoid strict alignment, we will get a much more disordered landscape.

This paper argues that middle powers are shaping a more fragmented world, characterised by an increasingly transactional approach to foreign policy, for which Europeans are ill prepared. It then sets out a strategy, informed by an analysis of the behaviour and priorities of a selection of middle powers, for how the European Union can defend its interests in this emerging world order.

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