Introduction

The announcement by France’s Macron and the UK’s Starmer that they would lead a multinational “defensive mission in the Strait of Hormuz" called the Strait of Hormuz Maritime Freedom of Navigation Initiative to protect “freedom of passage” in order to “to reassure commercial shipping and support mine clearance" during the last days of the Iran/US ceasefire in mid April 2026 was met with a collective shrug by financial markets and the larger public, even after German Chancellor Merz added that Germany stood “ready to play its part in ensuring freedom of navigation".

Europe and the UK, once again, have come late to the game and, in a desperate attempt to overcompensate for their tardiness, have further displayed their practical geopolitical irrelevance on the world stage. While they have been summoned to gradually foot the Ukraine bill taken by the US (coerced into propping their military spending to 5% of their GDP by 2035, with 3.5 percent spent on “core” elements such as weapons and troops), Europe and the UK have come to accept Trump’s terms on Greenland’s soft integration into the US geopolitical and economic sphere. The reasons behind Europe’s imperial decline are decades in the making, and are tied to Europe and the UK’s structural inability to decouple the major pillars that constitute power projection from the US. Trump has continuously highlighted these shortcomings by berating NATO’s lack of involvement in the 40 days of the US/Israeli aggression against Iran.

European leaders’ rituals of humiliation have been too commonplace to enumerate, especially under Trump’s second term. But if Trump’s Truth Social musings about Europe, NATO and other Western allies can be dismissed as over the top, his administration’s understanding of Europe’s pressure points reveals a reality that Europeans have not yet come to terms with. Their drawbacks are not tied to the performance of individual regimes, the frailty of their weakest link, or even their lack of unity on many fronts. Europe’s issues are structurally bound to the newest iteration of US imperialism; a form of US imperialism that has been gradually eroding for the last two decades, attempting to either drag its allies with it or displace its decline onto them. Europe’s lack of preparedness at the dawn of a multipolar world not only relegates European ambitions to rekindle its colonial past as a sovereign power among emerging competitors; it condemns it to the sidelines of the imperialist periphery and thus cements Europe within the position of vassalage to the US.

This paper aims to foreground the structural dependency of Europe’s major pillars, arguing that they are not only structurally bound to the US, but that this dependency has deepened in the last couple of years. As Kevin Cashman has convincingly argued, the relative decline of US hegemony will normalize “new levels of coercion — tariffs, energy dominance, sanctions, and demands for military spending” against its European allies in a clear attempt at “exporting shocks and extracting concessions”. US declining hegemony downscales Europe from a junior partner to “a region to be pressured” as it deploys what this paper has coined as “pillars of dependency” to exert said pressure. These two main pillars, energy and military dependency, do not constitute an exhaustive list, but allow for a better understanding of the gradual vassalization of Europe vis-à-vis the US.

In order to better understand Europe’s current dependency upon US hegemony, it must be framed within a larger historical arc. In other words, Europe’s current predicament cannot be understood outside of the rise of US hegemony and its eventual decline. This is why Giovanni Arrighi’s The Long Twentieth Century is especially germane. In it, Arrighi asserts that every hegemonic power, itself a product of the cycle of capitalist expansion since the inception of capitalism in the sixteenth century, will witness an exponential ascension that will trickle down onto its allies in the form of capital externalization and material expansion of capitalist production transcending rival competition in every sector. As this material expansion is adopted, imitated, and endorsed by other vassal states, it precipitates the second stage of the cycle, as the hegemon is unable to maintain its superiority, and its eventual decline is accompanied by an attempt by said hegemon to displace its decline onto the very same allies by switching from material expansion to financial expansion. Arrighi’s visionary concept was able to predict the US’s hegemonic decline as early as the eighties when Japanese and German manufacturing were starting to compete with their American counterparts. US capitalism’s relative decline is simultaneously counteracted and accelerated by financialization, especially if one considers how this decline has been particularly displaced onto its primary Western ally: Europe.

The second important intervention that Arrighi provides us with is the combination of intrastate hegemony with interstate hegemony. While most of the Marxist literature that succeeded Gramsci’s pathbreaking work on hegemony overwhelmingly focused on intrastate hegemony between classes within a particular enclosed nation-state, Arrighi’s thesis expanded the hegemonic drive to interstate competition while combining it with intrastate class rule. This framework of hegemony drifted away from embedding the concept of hegemony within ideology, placing it within the economy. For Arrighi, hegemony represents a superior mode of organization, production, and consumption that induces not only adherence to the ideals and values of the hegemon, but also generates the replication of these ideals and values as a model by vassal states. This concept of hegemony is to be understood differently from exploitative domination, where the hegemon rules and maintains its hegemony through the practice of violence without conferring any corresponding benefit or inspiring imitation amongst vassalized states. As Arrighi cogently points out, the more a declining hegemon attempts to displace its decline onto others, the more it hastens its own decline.

Arrighi’s understanding of the hegemon is one that could be combined with Robert Pape’s concept of the “Escalation Trap”. With this concept, Pape analyzes decades of US military intervention in order to deduce that these interventions almost certainly end up in a self-serving escalation trap that compels the US military to intensify air and ground campaigns that eventually bog US imperialism down into interminable wars that achieve limited tactical success while ultimately falling short on strategic outlook. Pape’s concept was propelled to the public sphere in the current US imperialist war on Iran, where he correctly predicted that the US would be “trapped” in a never-ending cycle of escalation as it was incapable of admitting strategic defeat in ceding the administration of the Strait of Hormuz to Iran while it was simultaneously incapable of securing an offramp to exit the war that had come at impossible political, economic, and geopolitical costs. Combining Arrighi’s cycle of hegemonic decline with Pape’s Escalation Trap gives us the hegemon trap and the vassal trap. The hegemon is compelled to ascend to the zenith of the capitalist production market by externalizing material expansion onto vassal states. Once the ideals and values are espoused by vassal states, they are trapped in a new round of competition between themselves and the hegemon. In order to overcome said competition, the hegemon is now compelled to externalize financial means onto his newfound competitors, as these vassal states are now trapped into undercutting their own economies to accommodate the failing hegemon. The hegemon trap morphs into the vassal trap and back again into an infinite vicious cycle of deterioration until both vassal and hegemon crumble.

The empirics seem to favor Arrighi’s predictions. According to the Fifth Annual Report on the screening of foreign direct investments into the Union, “the US accounts for more than 30% of total foreign Mergers & Acquisitions activity in the EU remaining the top investment source” as “40% of all cases notified through the EU's cooperation mechanism”. SOMO’s Big Tech M&A Tracker has uncovered that US Big Tech firms conducted 819 transactions in Europe without regulatory notification. This has sounded alarm bells in some quarters of the EU bureaucratic establishment, prompting it to call for the overhaul of merger rules and reorganize acquisitions by major financial corporations. But US capital remains unabated and unfettered in European markets, smashing all barriers to fulfill its historical role of counterbalancing the inevitable decline of US hegemony. Europe only needs to take a deep look at the UK to see a clearer picture of its financialized future. Yet Arrighi’s conception of financialization, although accurate, transcended the actuality of mergers and acquisitions and Foreign Direct Investment to include a more brutish transactional form of foreign policy that the hegemon deploys against its own vassals. This is why it is important to incorporate the two pillars of dependency outlined earlier in order to understand how they buttress the US’ chokehold over Europe, deepen its dependency, and offset the relative decline of US hegemony as it displaces costs onto its allies. Europe’s predicament is one that appears to be structurally tied to a vicious circle of vassalization. The more Europe attempts to break out of this cycle, the more it entrenches itself further in a deeper cycle of dependency and vassalization. Europe’s attempt at diversifying its energy portfolio away from cheap Russian gas has further entrenched its dependency on the volatility of US LNG (Liquefied Natural Gas). This has produced a vulnerability that goes far beyond LNG price fluctuations, as this dependency has already reconfigured Europe’s energy infrastructure. The fantasy that the Rearm Europe Project, a distorted reprise of Military Keynesianism, could reboot Europe’s economy and decouple Europe from the US military complex is thoroughly debunked.

The US National Security Strategy: Let’s get this Strait

The US National Security Strategy of 2025 is a very revealing document that simultaneously attempts to reconcile internal MAGA contradictions (immigration, America First, and an end to “forever wars”) while coming to the harsh realization that US hegemonic decline should be managed rather than ignored. The document claims that rather than US hegemony gradually slipping away from it, the US has been cursed with leadership from its inception, and this “ill-fated” curse and “concept of global domination” that has befallen the US should be undone by no other actor than the US itself “for itself”. As far as stages of grief go, this self-fulfilling and self-inflicted prophecy of the rise and ultimate cursed decline of the American hero seems to be lost between denial and bargaining. The document also simultaneously adopts the POV of the nation-state as the subject of history, gesturing towards further America First policies, while (re-) claiming the right to revive Trump’s Corollary to the Monroe Doctrine, in the form of the ‘Donroe Doctrine’; a clear attempt to resuscitate active and kinetic US hegemony in “its” Western hemisphere. In an attempt to resolve the many contradictions currently plaguing US hegemony, Trump’s second term has fused America First policies with coercive foreign policy termed burden sharing and burden shifting in the National Security Strategy. This fusion only makes sense if one understands that the relative decline of US hegemony, while ritualistically denied publicly, is being managed by being displaced onto allies and foes alike. Burden sharing and burden shifting serve two complementary purposes: rhetorically, they gesture towards an inward-looking empire that has for far too long ignored the very core of what had made it exceptional and indispensable for decades: its own citizens. The deployment of tariffs, now temporarily rolled back, not only disciplines other nations but announces that the era of protectionism is back. Burden shifting, alongside the DOGE debacle, on the other hand, frees up locked funds that would otherwise fund “forever wars”. The other cause is that the burden-sharing and burden-shifting fantasy of a persistent hegemonic world power that has willingly forgone its status is preserved by foreign coercion. Humiliation rituals at the White House that paint foreign leaders as subservient and dependent on US hegemony are part of the spectacle of managing decline. An isolationist and hegemonic US does not need the help of its allies; it demands it as a matter of principle.

On Asia, the strategy is clear: in order to avoid direct military confrontation with China, the US’s economic leverage in AI, biotech and quantum computing must be leveraged today and tomorrow while China’s reliance on fossil fuel imports and logistical nodes must be laid bare, exposed and, when appropriate, deepened. This strategy explains the recent wrestling of the Panama Canal and subsequent port contracts held by Hong Kong-based CK Hutchison, a subsidiary of a Chinese company, at both ends of the Panama Canal by the Panama Supreme Court, which granted temporary operating rights to Maersk and MSC shipping companies. The “Panama Port model” has also been replicated in the Chancay Port in Peru, as it has been reported that Maria Elvira Salazar, Chair of the US House Subcommittee on the Western Hemisphere, openly incited Peru’s incoming puppet administration to seize back Chancay Port from its Chinese owner. The US National Security Strategy that aims to contain China’s expansion, especially in Latin America, by targeting ports that are operated or majority-owned by Chinese entities could not be more transparent.

This strategy has also recently expanded to South Asia. Indonesia and the US have signed a defense partnership that grants overflight access to US military planes that can surveil, among other logistical nodes, the Strait of Malacca, which is conjointly managed by Indonesia, Singapore, Malaysia, and Thailand. About 25% of the world's traded goods, including 35% of oil transported by sea and 20% of gas, flow through the strait. Ramping up its commitment to the “Donroe Doctrine”, the US, by means of its General Laura Richardson, Commander of the US Southern Command, declared before Congress that 23 ports and 12 space facilities operated by China across Latin America were all under US military surveillance, collectively designated as "potential dual-use military-civilian assets." Unsatisfied with its attempts at curtailing the expansion of Chinese ports in Latin America, the US Department of Commerce has also ordered multiple US chip equipment companies to immediately halt tool shipments to Hua Hong, China's second-largest chipmaker. The US has also accelerated the formation of a special Pentagon group of ex-Wall Street experts called the Economic Defense Unit, which is attempting to break China’s near-total hegemony over the extraction, manufacturing, and export of rare earth minerals, undersea cables, and pharmaceutical precursors. This is precisely why the US has allocated $200 billion of financing capacity over 3 years and has opened channels with Brazil, the DRC, Australia, and Kazakhstan, to name a few. In that context, the EU, while claiming to draft a tech sovereignty package, the European Critical Raw Materials Act, that would “put in place a plan to wean Europe off U.S. tech, and not to anger the Americans”, has enthusiastically joined Pax Silica, the US-led initiative to secure supply chains for AI chips and critical minerals aimed at countering China’s hegemony in both sectors. China seems unfazed as it inaugurates a new Ice Silk Road on the China-Europe container route through the Arctic while expanding manufacturing in peripheral tax-exempt countries around the core European hinterland such as Morocco, Hungary and Turkiye.

Contrary to the recent catastrophic developments that have further unraveled US hegemony in the MENA region, the National Security Strategy appears to suggest that Europe is more of a concern to US foreign policy than the Middle East. Without diminishing the centrality of the Middle East to the US economy, especially in terms of gradually shifting the petrodollar to AI infrastructure and investment through Pax Silica in and beyond the region, the strategy ominously cites the Strait of Hormuz and Bab el Mandeb as potential chokepoints whose supply chain flows need to be secured. Under the guise of “restoring Europe’s civilizational self-confidence”, the US has continuously deployed public rituals of humiliation towards its so-called allies across the Atlantic, coerced its so-called Western partners into escalatory steps against Chinese-owned companies within their own borders, and forced NATO members to comply with its vision regarding militarization, Greenland and the US’s gradual retreat from the Ukrainian front. Furthermore, the US/Israeli imperialist onslaught on Iran was conducted without consultation of its NATO allies that were thereafter expected to pick up the slack when the Strait of Hormuz was effectively blockaded while willingly providing their bases for logistical and military support. And pick up the slack they have.

The Vassal Trap

The European Union has already spent an additional $32 billion on fossil fuel imports since the war on Iran began, while astonishingly urging Southeast Asian countries, themselves hard hit by the closure of the Strait of Hormuz, to avoid Russian crude as Russian LNG exports to Europe hit an all-time quarterly record for Q1 in 2026. European hypocrisy towards Russian fossil fuel imports, under US waivers, is further aggravated by its recent escalation against Chinese companies in Europe. As China scores its largest-ever trade surplus with the European Union in Q1 of 2026, with exports rising at a compound annual rate of 6% and its imports from the EU contracting by 2.5% a year, the EU has rushed the Industrial Accelerator Act. Described by the Financial Times as the “most serious attempts yet to push back against Chinese high-tech imports and their perceived threat to important local industries, such as automotives”, the “Made in EU” law could not have come at a worse time for the European Union. EU economies are already reeling and stretched beyond repair between a war they have not started or agreed to and a war that was dumped on their lap. Unphased, Brussels ramps up a losing trade war against China.

The European Union does not seem to have learned from the Nexperia fiasco that saw the Netherlands, spurred by the US’s “50% rule”, to outrightly seize a Chinese semiconductor manufacturer headquartered in Nijmegen in October 2025. The seizure triggered a series of cascading effects that almost ground the entire European automotive industry to a halt. The Netherlands was urged by the European Automobile Manufacturers’ Association (ACEA) to reverse its decision, which it eventually did. Escalating further, the EU has also approved a string of Russian sanctions, which now target, among others, 27 entities from mainland China or Hong Kong and block funds for key Chinese solar energy parts, citing security concerns.

In order to further its competitiveness, following the mantra of “bureaucracy reduction“, the EU has engaged in further neoliberal escapades, with the adoption of the so-called “omnibus packages”. With these ten policy compounds, the European Union aims to reduce legal guidelines for corporations within the legal areas of sustainability/ environmental policy (reducing pollution oversight), food safety, digital personality rights, regulation of the chemical industry (reducing testing requirements for chemical products), farming (higher subsidies for farms and fewer inspections), reinvestment of old EU funds, and a reduction of vehicle testing regulations, an extension of small business requirements to middle-sized businesses, and finally an omnibus directed at facilitating defense investments.

While it is fairly obvious that those policies are released by the EU with the hopes of stimulating its domestic market to slow its decline within the global economic hierarchy, such neoliberal policies risk repeating the strategic mistake that has been committed by the French government: by reducing general legal requirements for corporations, it risks offering its domestic markets to the highest bidder, which, alongside a reduction of legal requirements for large mergers, would increase the likelihood of takeovers by US corporations and thus a tightening of the vassal trap. The relentless European drive for self-destruction, guided by a misplaced urge and obsession to remain competitive, and quite frankly relevant, on the world scene, risks further eroding what is left of European competitiveness and accentuating its slide into complete vassalization under the relatively declining US hegemony.

Energy dependence: Europe’s US LNG problem is deeper than import dependency

In a report titled Where does the EU's gas come from?, The European Council boasts that the European Union has substantially reduced its dependency on Russian gas from 40% to 6% in 2025 by increasing imports from the US, Algeria and Norway. The latter country, the EU’s top gas supplier, has recently refused to provide viable alternatives to Europe’s energy dependency as Norway's Energy Minister claims the country will no longer seek to act as Europe's "green battery," but will instead shift its energy priorities toward safeguarding domestic power supplies. The US, now the largest LNG supplier of LNG gas to the EU, accounting for more than 58% of total LNG imports, has tripled its exports between 2021 and 2025. Both Norway and the US have understood the leverage they now hold over European countries. Although this quantitative dependency will have catastrophic repercussions on European households, power generation and industrial processes, it does not tell the whole story. Under the guise of “diversify[ing] the suppliers and routes [...] to obtain natural gas,” Europe has irreversibly altered its energy infrastructure in a manner that overwhelmingly favors LNG infrastructure. Another report by the European Council vaunts the merits of this diversification drive, highlighting that the EU is now “the world’s biggest importer of LNG,” as its largest importers are “France, Spain, Belgium and the Netherlands”. It is through the Netherlands that this infrastructure has started to take shape, essentially driven by two US energy companies that have lionized a large part of the LNG market in Europe: Energy Transfer and Venture Global. This section will explore how the Ukraine war, which was incited, supported, and sponsored by the US and is currently mainly targeting Russian refining capacity, has simultaneously irreversibly altered the European energy infrastructure landscape in favor of US LNG gas and catapulted two US energy companies to the heights of the new European energy dependency. This structural shift is not only consequential in its quantitative weight but also a potential geopolitical, economic, and social chokepoint that could be deployed as leverage at any point by the US to curb and coerce its vassalized allies in Western Europe and the rest of the continent.

Energy: US LNG imperialism and the structural repercussions on the European energy infrastructure

The US/Israeli imperialist war on Iran and the subsequent blockade of the Strait of Hormuz have had catastrophic repercussions on the global economy. Europe is definitely not insulated from this reality as it is, alongside South Asia, one of the most fossil fuel-dependent regions in the world and a net importer of fossil fuels and their downstream commodities. Already, the German airline Lufthansa has cut more than 20,000 summer flights, blaming the surge in jet fuel prices as the EU considers emergency measures that include the potential release of strategic reserves and coordinated refinery utilization as an imminent jet fuel shortage starts to bite. Russia’s decision to halt the flow of Kazakh oil to Germany, which supplies “more than 90% of the petrol, kerosene and heating fuel to the German capital, its airport and surrounding region, has further exacerbated this adverse situation. The US has accordingly ramped up its jet fuel exports to Europe, sending “about 150,000 barrels per day in April, or about six times the normal level”.

The extent of Europe’s dependency on cheap fossil fuels is not confined to jet fuel. Several reports have highlighted that German companies have effectively switched from their reliance on Russian gas to the Chinese model. This is particularly true for German chemical giants, most notably BASF, which has invested more than €10 billion in a new "Verbund" site in Guangdong, China. A recent IMF report titled “Reforming Europe under pressure” urges European countries to “respond to energy shocks through disciplined policies”. While severely underpricing the current energy shock as “smaller than in 2022”, the report urges that European countries “must stay the course on their energy sector transformation, raise the share of renewables while integrating the energy sector across Europe”. The IEEFA sounds the alarm as well, as a report claims that "LNG has become the Achilles’ heel of Europe’s energy-security strategy, leaving the continent exposed to high gas prices and to new forms of supply disruption”. Similarly, Chatham House’s AccelerateEU plan recommends “that Europe must transition to renewables to reduce its dependency on volatile fossil fuels” through the EU Emissions Trading Scheme (ETS), which has already reduced emissions by half since 2005. The report maintains that European countries should have a more unified position on ETS while conceding that the recent rollout of LNG infrastructure across Europe deepens Europe's dependency on US LNG gas and US energy domestic policy. It agrees with the Draghi report that urges Europeans to build a “joint procurement with a single EU buyer” to counteract said dependency. In the same manner, Jan Rosenow, Professor of Energy and Climate Policy at the University of Oxford’s Environmental Change Institute, addressing all 27 energy ministers of EU member countries, has recommended that said countries “Scale up the EU industrial electrification auction to catalyse investment at pace and volume; Reform energy taxation to level the playing field between electricity and fossil fuels and accelerate grid connections through innovative approaches to planning, financing, and delivery”. While these reports are well-meaning and point towards a progressive transition away from fossil fuels in Europe, they remain abstractly tied to a reality that is no longer applicable, as Europe’s predicament lies way beyond a temporary or reversible reliance on fossil fuels in general, and US LNG gas in particular. European energy infrastructure has been so structurally altered that it has entrenched LNG infrastructure to a point beyond reform.

The closure of the Strait of Hormuz has largely benefited US energy companies who, in clear defiance of the Trump administration’s wishes, have refused to ramp up production to counteract the explosive price increase. The war on Iran and the subsequent closure of the Strait of Hormuz seem to have turbocharged a growing trend long advocated by the second Trump administration. The US Department of Energy has recently tweeted, rather enthusiastically, an article titled “Trump 2.0 is unleashing American energy”. In it, the author praises Trump’s energy policy, claiming that “What Trump and Wright understand that the political pundits and the past administration did not, is that energy is everything. Energy is not a sector of the economy; energy is the economy.”

“Energy is the economy and the economy is based on tariffs” summarizes Trump 2.0’s foreign policy towards the rest of the world, especially Europe. Trump’s tariffs have hit a series of stumbling blocks, especially when energy is concerned. China has retaliated in kind, as no LNG shipments between the two countries have been registered since February 6, 2025, as the Sino-American trade war spills into the energy sector and as the US LNG industry warns the Trump administration that compliance with new maritime restrictions would be practically impossible. Japan and South Korea have fallen in line and have invested heavily in the US energy sector and mineral projects, pledging more than $550 billion and $100 billion respectively. Last year’s IEA report on gas was absolutely bullish on the prospects of LNG gas “to profoundly transform the global gas market”. Released a couple of months before the closure of the Strait of Hormuz, the report states that the US is well positioned to set the tone and solidify its position as the world’s largest LNG exporter as “LNG import prices move closer towards the short-run marginal cost of US LNG supply and unlock additional gas demand, especially in price-sensitive Asian markets”. The report states that the US and Qatar “together account for 70% of the roughly 300 bcm/yr of new LNG liquefaction capacity that is expected to come online globally by 2030,” which explains how they’ve both used this quasi-monopoly over the LNG sector in order to “warn the EU that its CSDDD is an 'existential threat,' risking LNG supply affordability via extraterritorial fines,” pressuring Europe to drop its Green Deal core.

The EU has chosen to ignore these hurdles while simultaneously shelving the idea of a complete ban on Russian LNG imports. Instead, officials have claimed that they were developing a roadmap to phase out Russian gas by 2027. Russian LNG still made up about 20% of EU imports of the fuel in 2024 and is expected to grow in 2026, imported to Europe through intermediaries such as Turkey and Greece. The extension of waivers on Russian oil and gas to include countries such as Hungary, Germany, Japan, and India, after all of these countries were meant to publicly disavow Russian fossil fuel imports under the threat of US tariffs, and the subsequent passing of Congress of the Graham Act that allows the White House sweeping 100% tariff powers over any country buying Russian crude, LNG, or pipeline gas only demonstrates the very volatility of US foreign policy and its continuous erosion of clarity. The fact that Europe plays along only proves its deep vassalization, as Germany’s gas storage facilities—the largest in Europe by far—are, as of the end of May 2026, less than 30% full, prompting a “fierce bidding war for flexible spot cargoes between Europe and Asia” as Europe braces for the “Coming Winter Energy Crisis”

Additionally, and quite embarrassingly for the EU, Trump has publicly stated that if the EU bought $350B worth of US energy, mainly in the form of LNG gas, he would consider tariff relief. Germany, of course, has acquiesced and folded first as Uniper signs a binding deal to buy LNG from Woodside’s Louisiana LNG export project as Europe keeps turning to US LNG to gradually and painstakingly replace Russian gas. But why is Europe so hooked on gas, and US LNG gas in particular? And is US LNG gas truly a better alternative to Russian and Qatari gas?

Speculating on gas prices in Europe

A little-known divestment development in the Arctic could signal how the accelerating scramble for gas, specifically LNG, could shape up in the near future. The Arctic Pod has reported that a facility, owned by the Russian company Novatek, which was constructing the Arctic LNG 2 modules, is reportedly shutting down before completing the 3rd module. The report adds that “the Arctic LNG 2 project was supposed to be the first of a series of projects that would secure Russia's position as one of the largest exporters of LNG.” As most of the technology needed for LNG projects is manufactured in the West (the EU, the US, Japan, South Korea and Taiwan), sanctions against Russia have finally started to bite in the gas sector.

In their article The fight over gas, Aaron Eckstein, Luke Egger and Ruth Jackson make a clear distinction between two levels of price development related to gas: the speculative level and the material level. The former is concerned with conjectures about potential future earnings that are tied to the many market developments and geopolitical events that affect the fluctuations of supply and demand, while the latter is concerned with current market oscillations of supply, demand, production processes, and logistics. Eckstein et al. argue that gas prices in Europe are also tied to three essential material forces: “firstly, the amount of gas that continues to be supplied to the EU by Russia, secondly, the global demand for LNG (Liquefied Natural Gas), especially in Asia, and thirdly, the expansion and reconstruction of the European energy infrastructure.”

Additionally, they further state that although the “gas infrastructure is very complex”, it “basically consists of three important areas: the pipeline network, LNG terminals and gas storage facilities.” Written in 2022, the article claimed then that due to its relatively restricted access to LNG terminals, the sub-region of “Germany, the Czech Republic, Slovakia, Austria, Hungary” was “the most vulnerable in Europe should Russian gas supplies continue to be so low or even fail altogether,” which partly explains German energy anxiety and the relatively agnostic stances vis-à-vis the protracted war the other countries have taken in the immediate aftermath of the Russian invasion of Ukraine. As specified in the article, the construction of LNG terminals along coastlines does little to affect the actual supply of gas to Europe and the world. The slowdown of the Chinese economy and the lenient winter Europe has been experiencing for the last couple of years may have affected demand on a large scale, but Europe’s industries (specifically Germany’s) are still hungry for power, even during what seems to be an unfolding recession. The authors go on to quote a reliable source that states that

“In the event of an immediate failure of Russian natural gas imports, about 25% of the natural gas demand (based on 2021) could not be covered in Europe at peak load times in winter. The deficit is infrastructural: even with sufficient availability of natural gas on the world market, there are no LNG terminals and pipelines to land and distribute the gas in Europe.”

Europe’s attempt at “freeing” itself from the shackles of Russian gas, exemplified by the now well-documented CIA-led sabotage and detonation of the Russian Nord Stream pipeline and the EU’s active participation in the war of attrition between Russia and NATO, has been expedited by the Russian invasion of Ukraine. Although there are many reports that prove Russian gas is still flowing into Europe through intermediaries (mainly Turkey), the overall strategy of the EU seems to be one that decouples from Russian gas and integrates with US LNG gas that is experiencing an exponential boom.

Europe’s LNG import capacity is expected to grow by 60% between 2021 and 2030, led by countries including Germany, the Netherlands, Turkey, Italy, France, Belgium, Greece, Finland, Poland and Croatia. Some 75–80% of Europe’s LNG imports will come from the US by 2030, up from 57% in 2025. will be provided by US LNG exports by 2030. The US already supplied 45 percent of EU LNG imports in 2024, while the EU purchased 43 percent of US LNG exports. This is precisely what the US fossil fuel industry, backed by the Trump administration, is aiming for: a bigger share of EU fossil fuel imports, with US LNG gas making up the largest share of these imports. Now that the Russian invasion of Ukraine and the closure of the Strait of Hormuz have remodeled the global gas infrastructure, US LNG gas imports appear to be the only alternative for Europe’s energy markets as the EU’s Von der Leyen reiterates Trump’s call that US LNG could replace Russian supply. Von der Leyen asked, “why not replace it with American LNG, which is cheaper, and brings down our energy prices?”

The two major oil and gas companies that have benefited the most from Europe’s exponential tilt towards US LNG gas are Energy Transfer and Venture Global. SOMO’s exposé on Energy Transfer details how the US oil and gas corporation, “one of the largest and most diversified energy partnerships in the country”, a key Trump donor and owner of the controversial $3.7 billion Dakota Access Pipeline, has bought up, through its subsidiary Sunoco, nearly €700 million worth of critical energy infrastructure across Europe and has consequently built a capillary network of liquid fuel storage terminals. From major fuel storage assets in Germany and Poland to strategically essential fuel terminals in Ireland and the Netherlands, Energy Transfer has quickly expanded to become an unavoidable energy hub in Europe. Buoyed by Trump’s LNG imperialism, Energy Transfer has created one of Europe’s most consequential energy infrastructure and supply chains, spanning from Ireland to Poland. Energy Transfer has also acquired Zenith Energy Europe, one of the largest liquid fuel storage terminals in Amsterdam, in 2024, then moved to buy the Whiddy Island terminal at Bantry Bay, Ireland’s biggest liquid fuels terminal, and “Germany’s largest independent liquid petrochemical storage operator, TanQuid, for €500 million. TanQuid owns and operates 15 fuel terminals in Germany and one in southwestern Poland.” The report adds that Energy Transfer plans to develop yet another LNG export terminal in the US to expedite more LNG gas exports to Europe.

Until recently, Venture Global was the other winner in the exponential increase of US LNG gas exports. However, an ICC arbitration ruling in favor of BP, which defined Venture Global’s behavior as failing to perform as a “reasonable and prudent operator,” has eroded the small credibility of the entire US LNG sector, putting further expansion at risk. But Venture Capital, bolstered by the full force of Trump’s LNG imperialism, remains unfazed, vowing to evaluate “all available options in response to the tribunal’s ruling and will continue to vigorously defend our position”.

The readjustment of the energy infrastructure in Europe towards LNG ports and infrastructure also gestures towards the end of the German miracle/business model erected in the post-World War Two era. Germany is going through a structural slump that started around 2020 and not a cyclical crisis, and the country still has not recovered after the pandemic; instead, it has only gotten progressively worse. Germany’s manufacturing bourgeoisie still yearns for the industrial model, a nostalgic paradigm that is present along the entire spectrum of German parties.

Another unlikely winner in the expansion of US LNG infrastructure and ports in Europe is the Asian market that is hungry for cheap(er) energy. This appetite is likely to overtake Europe’s energy needs, specifically LNG gas. In that context, Europe could act as a broker of US LNG gas on its way to Asian markets (specifically China), the same way Turkey acts as a broker of Russian gas on its way to Europe. This, in turn, would mean that Asian markets would become the favorite destination of US LNG gas, rendering the overall Trump plan to halt or reduce the speed by which China’s economy grows moot. Secondly, as Anne-Sophie Corbeau has pointed out, “Trump’s pledge to decrease domestic energy (including gas) prices could be counter-productive to his desire to bridge the deficit”. This means that more US LNG exports will ultimately create an inevitable contradiction between energy consumption in the US and energy consumption in Europe and Asia. Thirdly, the EU’s increasing investment in LNG infrastructure and its divestment in what was colloquially dubbed the “green transition” will create a glaring contradiction for Europe. Already, there are calls for the EU to water down its green policies in response to European companies complaining of high energy prices and stifling overregulation, as Europe's so-called green transition has turned out to be nothing short of an extension of green imperialism. For example, more than half a million people have been displaced in the DRC. This ethnic cleansing is driven by Rwanda, the EU's regional client state and its preferred deportation destination, which is stripping the DRC of the minerals needed for the imperial core's 'green transition'.

Finally, and more consequentially for European US LNG dependency, the NYT reports that as a consequence of the continuous closure of the Strait of Hormuz and the attacks on Russian gas infrastructure, US LNG production is already at full capacity in order to fill in the market gap. The article quotes Massimo Di Odoardo, Vice President of Gas and LNG Research at Wood and Mackenzie, stating that “All of the L.N.G. that is exported from the U.S., it's at full capacity”. The piece highlights how the US is attempting to cope with rising demand by building five new export terminals by the end of 2027. Current export terminals have already exported more than 18 billion cubic feet a day in March 2026, as LNG exports are projected to increase 18 percent in 2026 and 10 percent in 2027. But the sheer scale of exports means that these terminals “cannot easily export much more without deferring regular maintenance and more quickly starting new projects”. If short-term supply is assured, the cost of LNG gas and the infrastructure to support and circulate it, alongside the volatility of its price fluctuations, makes it one of the most expensive fossil fuels to be dependent on. This is why long-term demand for LNG gas is not assured, and this demand has to be artificially maintained.

As Arrighi had predicted, not only is US LNG production already at full capacity, but the US’s hegemonic energy dominance is now turning inwards and shutting off outward markets. As Francesco Sassi has detailed, total crude disruption due to the US war on Iran, the kinetic effects of the Ukraine war on Russia’s refining capacities, and Saudi Arabia’s misadventure in Yemen have inadvertently undercut the US diesel export market, pegging it against the internal market. As energy companies hoard weekly Strategic Petroleum Reserves released by the Trump administration in order to inflate local and international markets, Trump is now trapped between the upcoming November midterm elections and the greed of US energy corporations. U.S. diesel bursting beyond the $6 per gallon benchmark has already mobilized key Republican demographics in strategic sectors in agriculture (farmers), circulation of commodities (mainly trucking), and consumer products. As US imperialism has no other choice but to double down on its escalating commitment in the Middle East, local fossil fuel consumption and fossil fuel exports to Latin America and Europe (10% of its diesel comes from the US) will feel the pressure as the principal US fossil fuel clients. The hegemon energy trap mediated by an imperialist escalation trap is thus displaced onto the vassal and becomes the vassal energy trap.

Fantasies of a European Military Keynesianism

Europe’s structural dependency on US LNG gas is further compounded by its inability to decouple from the US security umbrella. The Rearm Europe project, ambitious in scale and scope, is theoretically aimed at partially solving this conundrum. Unfortunately for those involved, the Rearm Europe project relies on two false assumptions that will prove fatal for Europe’s drive for militarization and security independence.

First, the project is a revival of military Keynesianism, adopted originally by the US during World War Two with glowing success, since the US at the time represented a manufacturing powerhouse that was able to effectively rewrite its entire economy around a fossil fuel-powered war economy. Secondly, the project relies on the two major poles of Europe to be able to combine their strengths, mainly France’s military, energy sovereignty and capability of producing high-tech military units, weapons and equipment, as well as Germany’s almost infinite fiscal prowess. In this section, this paper intends to show how these assumptions- a revival of military Keynesianism in the old continent and a deepening of Franco-German collaboration- are not only deeply flawed but have also allowed US hegemony to sneak in through the back door. France and Germany have different views of the future of US hegemony. While the former has been quick to rush into what it perceives as a post-Pax Americana world, sometimes to catastrophic effect, on its own iteration of imperialism, the latter has clung to the pyrrhic and relative decline of US hegemony at all costs.

These two irreconcilable visions of US hegemony explain why the revival of military Keynesianism and a serious and effective decoupling of the European security umbrella from the US is nearly impossible in the near future.

The Next Hegemon Falters

Merz’s comments on US hegemony getting humiliated by the war on Iran did not land well in Washington. With mounting pressure at home driven by inflation, austerity measures, and rising energy costs, Merz must have also seen the IPSOS poll that shows 88% of Germans either “strongly” or “somewhat” agree that their country should not be involved in the war in the Middle East. After a couple of Truth Social posts decrying Merz and the state of the German economy, Trump ordered the pullout of 5000 troops from Germany. This move followed similar withdrawals from Romania and the announcement of further ones in Italy and Spain. While the timing of the withdrawal was conspicuous and beyond the bombastic headline and the panicked NATO Zoom meetings, this withdrawal, and further ones down the line, does not gesture to a transatlantic decoupling between Germany and the US but rather to a deeper integration on other levels that does not necessarily include boots on the ground. As the recent embedding of a senior U.S. officer into Germany's Operations Division military command shows, Germany’s military is further integrating into the US security umbrella, not decoupling from it.

In their most recent assessment of the Franco-German gradual military collaboration split, RUSI’s Christoph Bergs and Dr Linus Terhorst assess that the Future Combat Air System (FCAS) “was always ambitious”. The program had multiple pillars, of which

“a New Generation Fighter (NGF – a 6th generation fighter), an associated powerplant, Remote Carriers (a type of autonomous collaborative platform) and an advanced multi-domain Command and Control system dubbed Combat Cloud”. Terhorst and Bergs highlight why Germany and France need each other’s assets to complete the program, and why these very assets have been used as a competitive edge that each country is publicly claiming they can use to decouple from the entire program.

They explain that although Germany’s fiscal advantage is compelling, industrial capability is nevertheless constraining. France’s knowledge and expertise are key, but they have been bogged down by severe fiscal limitations. In their view, FCAS is essentially dead in the water, as Phase 2 of the project has been frozen as of mid-April 2026 due to internal contradictions within Germany and France. Merz’s Bavarian ally, the CSU, and representatives of the biggest manufacturing unions in the region, mainly Airbus, are staunchly against the programme arguing that it would further deplete manufacturing jobs and relocate them to France. On the other hand, Macron’s grip on Dassault, the weapon manufacturer and major partner in the programme, has been slipping due to his party’s gradual erosion in the electoral and political scene.

Similarly, Liana Fix at Foreign Affairs has penned an article on Germany vying to become the next hegemon. Fix highlights how Germany's military spending has dwarfed all other European countries, and is anticipated to triple its 2022 expenditure by 2029 to $189 billion. The main argument of the piece relies on neighboring anxieties around Germany’s exponential increase in military spending, citing that “rivalry among Europe’s countries never really disappeared” and that could lead to increased regional tensions, as “France, Poland, and other states could attempt to counterbalance Germany,” especially with the rise of AfD in nationwide polls that would perfectly mark the centenary of the rise of fascism by 2029. Fix correctly points out that these contradictions had been simmering for a while but were restrained by US hegemony over NATO. The gradual retreat of the US from NATO has allowed these contradictions to come to the fore again. Her solution to this increasingly likely nasty Franco-German divorce is the “Europeanization and a single market for weaponry,” as “Germany should embrace true European defense companies akin to Airbus”. Jennifer Kavanagh and Justin Logan went a step further and welcome the complete decoupling of US and European militaries in Europe, echoing the EU’s hawkish position that it should “take ownership of conventional security on the continent,” not to regain its sovereignty but due to the fact that the US’s financial situation has become unsustainable.

While not off the mark, this type of analysis suffers from methodological nationalism and regionalism. Although the authors recognize the waning role of US hegemony, albeit framed as incidental, in containing rising tensions in Europe, they fail to consider the current disruptive role of US hegemony in further driving these poles apart and the different relationship these two poles still hold to US hegemony. This analysis also fails to consider the contrasting roles and views that France and Germany have for Europe and US hegemony. France considers that the Europeanization of militarism aids it in projecting its imperialism beyond US hegemony, while Germany, under Merz, considers the European project as a conduit that could save US hegemony from its own eccentricities. By deepening its economic ties to Europe, Germany clings to the waning US hegemony in the hopes of salvaging it. Ironically, Mario Draghi’s solution for Europe in the form of “pragmatic federalism” has metastasized into two competing forms of pragmatic federalism. Thomas Fazi has articulated Germany’s predicament, naming NATO “a dangerous grift” that enables the US to “milk Europe” dry. Fazi goes further by quoting French historian Emmanuel Todd, who “has argued that much of what passes for nationalism in the West today — from Germany to Japan — is in fact a form of “imaginary” nationalism: vassalage towards the US dressed up as sovereignty”.

Germany: vassalage towards the US dressed up as sovereignty

After effectively torpedoing the FCAS programme, Germany announced it would purchase additional Lockheed Martin F-35A Lightning II stealth fighters. This announcement, alongside the withdrawal of the UAE from financing Dassault’s Rafale F5, combined with the scrapped Australian-France submarine deal (unilaterally scrapped from Australia's side, opting instead to acquire nuclear-powered submarines from the US and UK via the new AUKUS security pact, intended to counter Chinese influence in the Indo-Pacific), cannot be taken as individual random geopolitical events. US military hegemony is clearly attempting to curtail France’s ability to deploy its military sovereignty and capabilities beyond its borders by pressuring closer allies to hit French imperialism where it hurts: sales.

On the other hand, as Germany’s purchase of additional Lockheed Martin F-35 shows, US client states, such as Germany, the UAE, and Australia, are not only expected to sabotage ongoing competing military contracts and projects but simultaneously foot the bill for US weapons and equipment, even if these contracts are restricted by US manufacturing faltering. There is ample evidence, from Switzerland to Estonia, Latvia and Lithuania, and Denmark, that US allies are signing military contracts that have bottlenecked at the key point of production or have been shifted to the Middle East to be consumed in Operation Epic Fury.

Although Rheinmetall, Germany’s darling tank and ammunition maker, has ramped up its artillery shell production from 70,000 rounds annually in 2022 to around 1.1 million rounds, overtaking US numbers in the process, Germany remains a disruptive force within Europe’s collaborative militarization projects. After effectively disrupting and freezing the FCAS, Germany’s Sky Shield, a European air defence project, has preferred US and Israeli air defence systems rather than Franco-Italian ones. It was also reported that Germany’s automotive sector, currently bleeding due to fierce competition from its Chinese counterpart and growing US tariffs, would gradually be integrated into the production supply chain of the Iron Dome, the Israeli flagship air defence system. Mercedes-Benz, alongside VW and other German automakers, has shown growing enthusiasm in transitioning towards defense production. It will not be long before other industries, suffering from the same decline as the auto industry, such as the chemical and industrial ones, follow suit. As all of these industries falter, as the painful and gradual transition towards weapon manufacturing stalls, the Merz government takes it out on organized labor, calling on workers to accept cuts in healthcare and public pensions, claiming “Everybody has to give something,” triggering a chorus of boos. Germany’s gutting of most EU armaments projects was not enough; it bypassed the EU altogether as it intends to deploy its own military satellites to the tune of €35bn.

France’s aborted imperialism

On the other hand, France’s recent ‘solo’ imperialist incursions have not yielded the desired outcomes. The overnight reversals of French imperialism in Burkina Faso, Mali and Niger and their gradual replacement by the Russian security umbrella have only been met with a not-so-implicit return to Islamist and Al-Qaeda linked factions to prop up French interventionism, punish dissenting governments and undermine Russia’s security contracts. In this manner, rather than attempt to supersede the decline of US hegemony by gradually ramping up its own form of imperialism, French imperialism has only mimicked the US playbook by becoming its own regional disruptor in the Sahel.

Macron’s recent escapades in the Middle East, especially in the last year, have yielded no results either. The decision to send the Charles de Gaulle aircraft carrier to the Strait of Hormuz through the Red Sea was met with apathy by all major players in the Gulf as France continues to follow CENTCOM’s lead in defending GCC countries and Israel from Iranian ballistic missiles, using US bases as its launchpad. France’s intervention in Lebanon has been equally embarrassing, as US diplomacy has effectively sidelined its role and influence in the country for the foreseeable future. Furthermore, dissent in France’s sphere of influence in New Caledonia and Guadeloupe has forced French imperialism to send troops and personnel to the islands, accelerating calls for nationalist rallies and independence from the hexagon.

As illustrated in later sections, France’s attempt at rushing into a post-US hegemony world has yielded few results, but it is in France’s opening of its market to US capital that has undermined its sovereignty as much as its thirst for imperialist recalibration. One particular example of such mergers and acquisitions lies in the approval by the French government to sell LMB Aerospace, or the decision by Air France to favour Starlink’s in-flight WiFi product over European counterparts. These economic decisions are part of a larger pivot of mergers and acquisitions by US capital in Europe that will be discussed further in later sections but point nonetheless to the erosion of European sovereignty over military spending and production that are still tightly coupled to the US military umbrella.

Although France’s aborted imperialism has not been as successful as its ruling class had hoped, its weapons exports have nonetheless endured and proliferated. During the 2021-2025 period, France was able to increase its weapons exports by 21%; 80% of these French exports went to non-European buyers such as India and Egypt, as European states still rely on US weapons exports. France has inadvertently undermined another NATO ally, in Turkiye, in its pursuit of a larger market share in the weapons sector by signing a binding defense pact with Cyprus. Similarly, Germany’s weapon exports have also surged 15% during the same period, as major buyers include Ukraine, Egypt and Israel. While the Rearm Europe Project has created tensions within Europe, mainly between its two poles, Germany and France, European weapon manufacturers have reclaimed some of their global standing, albeit as competitors rather than as a homogeneous entity, mainly in Asia and in the Middle East as reliable sources of weapon exports.

France and Germany’s understandings of the purpose of the Rearm Europe Project are irreconcilable beyond remedy. But even if their views could align, the fantasy of reviving military Keynesianism rests on dubious pedestals that are no longer applicable today. Zooming in on Germany, the most prominent fiscal expeditor in the last couple of years, will comprehensively debunk the idea that the German iteration of the Rearm Europe project will be able to reignite the German manufacturing economy.

Germany’s fantasy of reviving military Keynesianism

Germany’s economy is in secular and structural decline, either stagnant or bearish since the European energy crisis that started following the Russian invasion of Ukraine. The German government has officially cut its forecast for economic growth to +0.8% for 2026 (down from +1%). This dim forecast comes after back-to-back recessions in 2023, 2024 and 2025. Even before the closure of the Strait of Hormuz, a PwC analysis has reported that the manufacturing sector faced a 5.6% drop in revenue in 2025, compounded by a staggering 22% production loss since before the COVID lockdowns. Additionally, capacity utilization has fallen to its lowest level in six years. As Bankruptcies soared in 2025 (22% more than 2024), unemployment, especially in manufacturing, where, since 2019, 245,000 manufacturing jobs have already been lost, is primed to dramatically increase in the latter half of 2026. Merz’s government has recently introduced the health insurance reform, yet another austerity measure that would, according to Merz, save “more than €16 billion, [we are] preventing premiums for those with state health insurance from having to rise." German steel production, once the country’s pride and joy, is down 12%. There are 2 million fewer cars produced in Germany than in 2017. Stagflation is looming in Germany as commodity prices start to increase in mid-April of 2026. What is Merz’s plan to overcome this gargantuan economic hurdle? Military Keynesianism. DW has already gleefully announced “a golden era for companies such as Rheinmetall and Airbus. They can now practically dictate prices.” But will this renewed military Keynesianism fix the German economy? Has it ever been successful?

The German government has secured approval from the lower and upper houses of parliament, the Bundestag and the Bundesrat, for constitutional change, paving the way for unlimited defense spending and €500 billion ($542 bn) to be invested over the next twelve years. Merz’s government pushed in the Bundestag for a law that would effectively end the ‘fiscal brake’ that made it illegal for German governments to borrow beyond a strict limit or raise debt to pay for public spending, a gesture towards Germany becoming the trend setter for the rest of Europe. The military deficit spending will now have priority above everything else. It will effectively become the only budget that has no limit. It is estimated that annual government spending due to the new German fiscal package will dwarf the spending boom that accompanied the postwar Marshall Plan.

Merz seems convinced that he can reignite the German miracle by reproducing it in the weapon industry and lowering wages relative to productivity. The infrastructure budget rollout can already be felt in many parts of Germany. Bremerhaven, the largest vehicle terminal hub in Europe, has recently been primed for an upgrade priced in the region of €1.35 billion. The redesign is meant to gradually transition the terminal from a vehicle terminal to a terminal that is able to handle heavy military hardware and large-scale deployments of armored units, rendering it a major supply line hub for a potential war. The military upgrade was accompanied by a pledge by APM Terminals and German port group Eurogate to invest €1 billion in further modernising Bremerhaven container terminal. This confirms the private sector’s enthusiasm for Germany’s gradual shift to a war economy. But beyond some infrastructural spending and the ramping up of artillery production, Germany's defense and infrastructure spending doesn’t seem to be boosting the German economy as intended, prompting Florian Warweg, a journalist at the Berliner Zeitung, to ask the German government, “What became of 111 billion euros in defense spending?” According to Bertrand Benoit and Tom Fairless at the WSJ, bureaucracy and capacity bottlenecks are severely impeding this rollout. Benoit and Fairless suspect that “Some of the money is being spent on running costs rather than new projects”. They add that LNG infrastructure, on the other hand, was rolled out at impressive speed, completing three liquefied natural gas terminals in less than 10 months.

Bloomberg analysts are also skeptical that the German miracle can be revived, stating that “Merz faces an aging population that’s set to hold back growth and exacerbate strains on the federal budget and social security system.” As Michael Pettis reminds us, “Germany doesn't need an economic miracle. It needs to shift away from an export-oriented model that is based on weak domestic demand to make Germany competitive, and on large trade surpluses to externalize the cost of that weak domestic demand.” Expanding Germany’s NATO and military budget will not achieve that.

The US withdraws from Europe, and Germany in particular, to further dependency and not to decouple. A glaring example of this tactical withdrawal but strategic recoupling lies in the US decision to pull back on long-range missile deployment in Europe, a Biden-era security commitment to Europe that the US would not abandon its allies in the face of Russian gains in Ukraine. This pullback has increased panic within European corridors, as officials were quoted grappling with this new reality as “large and dangerous gaps in Europe’s security for years while governments strive to develop, test and deploy domestic replacements”. At its core, confusion, fear, and panic are the purpose of this tactical retreat. In order for Europe to deepen its dependency on the US security umbrella, it must imagine a world where the US has already abandoned it; it must then grovel for more US security guarantees while footing the bill for the war to come. With this move, US hegemony responsibilizes European countries, nudges them to invest more of their GDP into military spending, and diverts part of their spending to US military manufacturers. Confusion sells. Fear and war are back on the agenda.

The failure of Military Keynesianism and the drums of war

But will Military Keynesianism work on a scale unseen before in Europe, and in Germany, in particular, to fix the economy and reinstate the EU as the imperialist force it once was?

The Marxist Economist Michael Roberts is extremely skeptical that it could boost the economy to begin with. Roberts takes the UK as an example to dismantle any misplaced notion that Military Keynesianism could fix the crumbling UK economy:

“Firstly, arms production is unproductive of future value as it does not re-enter the next production process and will threaten the reproduction of capital: “There is a theoretical question often at debate in Marxist political economy. It is whether the production of weapons is productive of value in a capitalist economy. The answer is that it is, for arms producers.

The arms contractors deliver goods (weapons) which are paid for by the government. The labour producing them, therefore, is productive of value and surplus value. But at the level of the whole economy, arms production is unproductive of future value, in the same way that ‘luxury goods’ for just capitalist consumption are. Arms production and luxury goods do not re-enter the next production process, either as means of production or as means of subsistence for the working class. While being productive of surplus value for the arms capitalists, the production of weapons is not reproductive and thus threatens the reproduction of capital. So if the increase in the overall production of surplus value in an economy slows and the profitability of productive capital begins to fall, then reducing available surplus value for productive investment in order to invest in military spending can damage the ‘health’ of the capitalist accumulation process.”

Secondly, Roberts is adamant that Military Keynesianism did not in fact save the US economy from the Great Depression: “It was not ‘military Keynesianism’ that took the US economy out of the Great Depression – as some Keynesians like to think. US economic recovery from the Great Depression did not start until the world war was underway.”

Either Merz has been told these two facts and has chosen to ignore them in order to boost the German economy on yet a new failing business model that will postpone rather than fix the German economy, or Merz is looking for a war with Russia in order to boost the war economy on the corpses of thousands and millions of workers while DW glorifies child soldiers on the eastern front of Ukraine the same way Hitler increasingly relied on child conscripts as the Red Army defeated the German army in 1944.

Military Keynesianism is a failed economic model that the EU, spearheaded by Germany, has banked its economic, geopolitical and political survival on. Researchers sponsored by the European Parliament agree that the Rearm Europe project could further increase political instability rather than alleviate current economic woes. As they put it: “financing higher defence expenditure through tax increases or cuts to other public spending once the NEC expires could weaken economic activity and trigger political opposition, thereby raising the risk of instability”. But why does the EU persist in pursuing this model given the growing Franco-German divide at the heart of the Rearm Europe Project, the rise of anti-war populism along the entirety of the political spectrum excluding centrist parties and the clear indications that NATO, European countries and Ukraine are no match against Russia’s war economy?

While admitting that the US war on Iran would have been impossible without the 5000 sorties from NATO bases, the NATO Secretary General Mark Rutte’s recent intervention on Iran might give some pointers. He asks:

“Why was the United States necessary to take out the nuclear capability of Iran? Why is now everybody again looking at the United States when it comes to the Houthis in the Red Sea? Because somehow the Europeans did not have enough capabilities to do it themselves. That is Europe’s backyard. It’s not the United States’ backyard. In the future, what you get from a stronger NATO is that Europeans can take care of their own backyard.”

Rutte’s logic encompasses the logic of the majority of the current European ruling class, one that resonates with Arrighi’s sensational prediction. Mimicking the ideals and values of the failing US hegemon will ultimately enable Europe to “take care of their own backyard”. The logic that stipulates that it is incumbent on Europe to endorse a failing hegemon on its downward spiral in order to pick up the crumbs of its inevitable fall seems alluring to the European ruling classes. By abiding by this logic, Europe has deepened its structural dependency on the US military. Quantitatively and qualitatively, Europe’s Rearm Project constantly redefines its derisking position by continuously postponing its realization. Nowhere is this position clearer than Poland’s foreign minister Radek Sikorski, stating that “Europe must accept greater risk in the short term to avoid far more serious dangers in the future”. In line with that framework, Ursula von der Leyen has proposed a very ambitious plan dubbed the Rearm Europe Plan, whose sole purpose is to free up to €800 billion to finance an exponential increase in defence spending by gradually increasing EU members’ defence spending by 1.5% of GDP per year on average; €650 billion could be freed up over the coming four years.

“We are in an era of rearmament, and Europe is ready to massively boost its defence spending, both to respond to the short-term urgency to act and to support Ukraine, but also to address the long-term need to take on more responsibility for our own European security”.

German arms manufacturer Rheinmetall has seized this opportunity as it aims to lionize on Volkswagen’s idle Osnabrück factory, which could be a prime candidate for conversion to military production, as the Financial Times enthusiastically cheers for this deadly transition with articles titled “From trains to tanks” describing it as a “rare glimmer of hope” to “nearly a quarter of a million manufacturing jobs that have disappeared since the onset of the pandemic.” Rheinmetall has since boasted record sales in the first half of 2026 as profits soared 74%.

Adding to all of Germany’s catastrophic economic decline is the “NATO bill” which is also pegged to rise exponentially to an additional 544 billion euros per year, for a total expenditure of 915 billion euros: this is what the countries of the European Union would have to pay in order to increase their military spending to 5% of their GDP, as per Trump’s strong recommendations from NATO countries. In such a scenario, the defense budgets in Germany and France would rise to a staggering 236 billion euros (+136 billion). There are two likely winners from this explosion of militarism: US weapon manufacturers and bond investors. As the Financial Times reports, “Bond investors brace for Europe’s defence spending ‘bazooka’”; the market agreed as Rheinmetall’s shares, Germany’s largest defence company, jumped 18% overnight but later dramatically cooled, as bond markets buy rumours but sell war. Additionally, recent research by SIPRI confirms that major arms purchases by states in Europe increased by 94 percent between 2014–18 and 2019–23, as 55% of European arms imports came from the United States alone. These numbers are likely to increase exponentially in the coming years, as the same report shows that less than 22% of arms purchased by the EU were made by manufacturers in EU states.

Germany’s Tomahawk missile plan is yet another glaring example of how Germany attempts to channel the Rearm Europe Project into integrating the European military supply chain further into the US military supply chain. As detailed by Politico, the German government is planning to spend upwards of €3.4 billion on US Typhoon launchers and Tomahawk cruise missiles to completely revamp its ground-based long-range strike capability “while pushing to get European industry into the supply chain”

Furthermore, and as Juan Mejino-López and Guntram B. Wolff have shown, buying an F35 from Lockheed Martin is not a standalone purchase, as it “often involve(s) high volumes of related equipment, included either in the same sale and/or at a later point” such as “AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM), produced by RTX (US), with sales to Germany and Poland alone amounting to more than 800 missiles”. Wolff and López have also demonstrated how the US’s quasi-monopoly over the delivery of weapons to Europe has pegged European countries against each other, such as Patriot missile deliveries that were diverted from Switzerland to Germany. The long report concludes, without a shred of a doubt, that Europe’s “material dependencies…lead to substantial economic and geopolitical dependencies”, adding that European militarism has opened itself to the highly volatile and unpredictable US imperialism that is capable of shifting priorities overnight, as seen in the war on Iran. This dependency on imperialist volatility is compounded by a faltering manufacturing capacity that has mimicked Germany’s refurbishment of the automotive sector towards weapon production to boost output.

The most poignant analysis of NATO’s military dependency on the US comes from Nel Bonilla. In it, Bonilla correctly describes the NATO 3.0 project as “an explicit vehicle for U.S. power projection” that provides the current impetus for “troop withdrawals, industrial militarization, and unprecedented structural integrations”. If, as Bonilla claims, “multipolarity is something to be managed and actively undermined,” then Germany remains the perfect playground for all three developments. The announcement of the US withdrawal of 5000 troops from Germany is the overture of things to come. Germany’s supercharged shift towards a war economy and industrial militarization should not be understood as a quest for a more sovereign command over its military output but, as the Tomahawk missile plan and the F-35 purchases can attest to, a vehicle for the “unprecedented structural integrations” of German, US and Israeli military supply chains as “Washington retains the ultimate strategic keys—from the nuclear umbrella and long-range strike capabilities to the digital brain of intelligence networks, cloud infrastructure, and AI integration”.

The combination of Germany’s vassalage to the US military dressed up as sovereignty and France’s aborted imperialism has rendered the US military indispensable to the two largest European states attempting to steer the Rear Europe Project. On the one hand, Germany’s role has sabotaged any effort at a holistic European joint military supply chain, preferring to undercut any such attempt by attempting to couple the European military supply chain with its American counterpart; on the other hand, France’s aborted and premature imperialism has inadvertently opened new avenues for US foreign interventionism to deepen European dependency on US imperialism rather than undermine it. These two central powers at the heart of the Rearm Europe project have aggravated and intensified Europe’s vassalization and dependency.

This structural dependency, similar to the hegemon trap outlined earlier, makes this endorsement seem like the only viable alternative for a squeezed Europe. The logic states that if the US grip on military hegemony is indeed slipping, then the role of vassalized European ruling classes is to deepen their dependency, vis-à-vis the Ukraine war, the Strait of Hormuz, and the Bab el Mandeb strait until they are capable of taking care of their own backyard. This logic seems more of a syllogism given the many premises that undercut it. Firstly, these wars were initiated, militarily and logistically supported, and promoted by the very declining hegemon attempting to undercut its decline through wars and financialization. Secondly, Europe had to be dragged into these wars as it lacked the structural aptitude to sustain their continuity. Europe’s economy was severely damaged, its infrastructure forever altered, and its military’s dependence deepened as a result of these wars. While centrist parties have temporarily benefited from the moral panic that these wars have afforded them, the structural dependency that has accompanied them has undermined their grip on power.

Conclusion: The future of Europe is ot vassals’ past

Europe has recently upped the ante in its trade war with China as the “European Commission [has] declared its trade and economic relationship with China “unsustainable”, pointing to a daily trade deficit of €1 billion”. While this deficit represents a clear and present danger to Europe’s economy, a trade war with China would most certainly escalate Europe’s predicament rather than mend it. As Jianlu Bi notes, Europe’s economy still depends significantly on China: “Germany relies heavily on Chinese automotive consumer markets, and Hungary welcomes cleantech infrastructure, central and Eastern Europe depend on Belt and Road Initiative trade links” as Chinese foreign investment in Europe has continued to rise in the last decade. Even Wolfgang Munchau agrees, as he claims that “a study just came out in Germany showing that the reliance on China has gone up further in the last few years. If the EU were to impose tariffs and sanctions on Chinese companies, and China would retaliate, the competitiveness situation of many European industries would actually deteriorate.”

There are researchers such as Olivier Blanchard, Beatrice Weder di Mauro, Pascal Lamy, and Enrico Letta who are still optimistic that they can save Europe from itself. These researchers have launched a project called Europe 2050 in order to imagine, with the help of other experts, “what Europe should aspire to become by 2050”. A column by Eric Lombard titled Europe will no longer be held captive by Zeus promises “building a credible European defence capability independent of the US, through a proposed "Europe of the Armed Forces" spanning eleven countries”. Another column by Enrico Letta titled One Europe, One Market Roadmap: Building Europe's Capacity to Act argues that “completing the Single Market [...] is the strategic foundation on which Europe's capacity to act in the world by 2050 will depend”. These columns that brim with hope and unmet aspirations seem to ignore the very reality underlying the European project. Europe’s conundrum is not one that lacks ambition or an imagination that would allow it to concentrate more power and project it onto the world scene. Europe’s dilemma is structural and compounded by its inability to correctly diagnose its current vassalage status. Other researchers at the Centre for European Reform are hawkish about a potential trade war with China. In their alarming report on the China Shock 2.0, Sander Tordoir and Brad Setser call for “a European "301" and suggest using it against Chinese currency policies that suppress the yuan”. A policy that will undoubtedly have an audience in Brussels as Kaja Kallas, EU’s top diplomat who appears on her way out, has already described China's economic policies as "a cancer".

Europe has willingly turned a blind eye to US capital encroachment upon every capillary of its economy. By attempting to postpone its own gradual decline, the US has displaced its own capital onto Europe’s shores and, in doing so, has accelerated its own decline. By undercutting Europe’s main sectors, underscored in this paper by the two pillars mentioned, the US can no longer count on its abiding Western ally in order to supersede the upcoming crisis. Europe’s structural dependency on US LNG gas, for example, goes beyond its dependency on a volatile fossil fuel tightly tied to the whims of geopolitics. It has reorganized the entirety of the European energy infrastructure around LNG gas while rendering Asia, which is even more starved for energy as a direct competitor for energy in a tightening market. Europe cannot win this energy war either.

In her forthcoming book, La fin de l’Europe, Marlène Rosano-Grange (2026) proclaims that the end of Europe was already sealed in the 1970s and was accelerated with the fall of the USSR as the European Union threw itself in the arms of its transatlantic partner. According to Rosano-Grange, the undoing of the hybrid ordoliberal order has intensified the vassalization of Europe, a process that was, and still is, deliberate and voluntary. As the European project heightened its demise in the late 1980, Sami Amin released a book titled Delinking: Towards a Polycentric World in which he asked prescient questions regarding the Third World’s structural dependency towards the ‘Global North’ that now applies to Europe’s vassalized ruling classes: “Is it possible for the Third World to escape from the constraints imposed by the world's economic system? What room for manoeuvre do these states have, and are they condemned to dependence?”. Europe seems to be willingly and enthusiastically condemning itself to perpetual and structural dependence