DAVOS, Switzerland — President Donald Trump’s Greenland fiasco has done Europe an unintended favor. His erratic bullying has forced European leaders to recognize that they need independence from an unreliable America — and to break with their own moribund economic and security policies.
Trump monopolized the headlines at the World Economic Forum here this week, threatening a Greenland invasion and then backing down, giving him the media dominance he craves. But the deeper conversation was something different — an open European rebellion against Trump and a bracing dose of honesty at a gathering where polite avoidance has been an operating principle. Europeans this week stopped pretending that their economies will revive if they keep slipstreaming behind America, the global hegemon.
Europe’s stagnation has been a background theme of nearly every Davos conference I’ve attended for 25 years. Changing that status quo was hard, while following America’s lead was easy. But Trump has shifted that balance in his second term. He has transformed the transatlantic alliance into a humiliating exercise in tariffs, White House demands and insults. European leaders played along for most of last year, but by this week, they were fed up.
Canadian Prime Minister Mark Carney, whom I’ll count here as an honorary European, put it bluntly in a speech to the forum: “We are in the midst of a rupture, not a transition. … When the rules no longer protect you, you must protect yourself.” Carney listed a string of independence measures his country is taking, including a new “strategic partnership” with China. Given Trump’s nonsensical Canada-bashing, who could blame him?
Europe needs to fix an economy that “still lags behind that of the U.S.,” said French President Emmanuel Macron. While urging change, he also celebrated Europe’s reliability and order in contrast to Trump’s disruptive policies: “Having a place like Europe, which sometimes is too slow, for sure, and needs to be reformed for sure, but which is predictable, loyal … it’s a good place.”
Trump administration officials paraded through Davos like a triumphant army, further galvanizing Europeans. Christine Lagarde, the widely admired head of the European Central Bank, found Commerce Secretary Howard Lutnick’s tone at a dinner Tuesday so dismissive that she walked out, according to a source who was there.
Greenland was a trigger, but the deeper anger was over what Macron described as economic “vassalization,” at a moment when Trump is in imperial overdrive. European leaders know they are being left behind by an AI-powered surge in the U.S. economy. Europeans want to join in that boom — and they finally seem to recognize that the European Union’s rules and regulations, and its heavy tax burden, are stifling the growth they need.
European leaders want their own version of “Liberation Day.” That means new trade partnerships with Latin America, Africa and Asia, and an understanding with China that it must share technology if it wants access to the E.U. market. But most of all, it means creating innovation-friendly economies at home — with fewer rules, lower taxes and a less rigid welfare system.
Europe needs an “urgency mindset” about economic reform, European Commission President Ursula von der Leyen told the forum. “Europe must speed up its push for independence. … The world has changed permanently. And we need to change with it.”
The reform pathway was clearly marked by Mario Draghi, former head of the ECB, in a September 2024 report on declining European competitiveness. “A wide gap in GDP has opened up between the EU and the US,” he wrote in a foreword. Since 2000, he noted, real disposable income had increased almost twice as much in America as in the EU.
“Europe largely missed out on the digital revolution led by the internet and the productivity gains it brought,” Draghi wrote. Just four of the world’s top 50 tech companies were European, he warned. Of the billion-dollar “unicorns” founded in Europe between 2008 and 2021, nearly 30 percent moved abroad to escape taxes and restrictive regulations.
Draghi’s message was clear to every European business and political leader I’ve talked to over the past two years. But in Britain and Europe, weak leaders haven’t been able to implement reforms — and Euro-sclerosis seems worse than ever. A study cited by Deutsche Bank found that a year after Draghi’s report, only 11 percent of his 383 recommendations had been adopted. Trump may have helped break that impasse.
Trump’s takeover play in Greenland gave Europe a moment of shock therapy — bursting a bubble of passivity and deference. By the end of the week Trump, had backed off his demand to buy the island, facing united opposition from European leaders and a sell-off of U.S. stocks and bonds. Greenland was an icy TACO, as many Trump watchers had predicted. But for Europe, it was a wake-up call.
Trump complained at Davos that Europeans should be thanking him for all the great things he’s done for them. This time, he may actually be right. The Greenland putsch might finally have shocked Europeans into taking control of their destiny — and beginning the economic reforms they need to survive as prosperous countries.
The transatlantic alliance won’t collapse after this crazy week in Davos, but it’s going to be different.
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