On Tuesday, May 20th, the Cercle Munster in Luxembourg hosted Professor Roland Gillet for a lecture on "The Power Balance Initiated by the Trump Administration in Response to National, European, and Global Reactions: Dangers and Opportunities in an Ever-Globalized World." Organized by the Ecofin Club INTL, of which President and Founder Didier Roelands leads with commitment, this event drew an attentive audience interested in current geopolitical and economic issues. The event was supported by AGEFI Luxembourg.
During his speech, Roland Gillet addressed France’s financial situation, highlighting the country’s staggering debt and funding difficulties on one hand, and ongoing substantial expenditures such as "the Baignade Plan"—a project to depollute the Seine and Marne rivers—which has involved 1.4 billion euros since 2016, with these "investments" accelerating in preparation for the Olympic Games.
He also compared the power of the United States, emphasizing their cohesion in wealth creation and inter-state solidarity, with the European situation marked by persistent divisions. He recalled the details of the NextGenerationEU (NGEU) plan, which is equipped with 806.9 billion euros to support the EU’s economic recovery following the COVID-19 pandemic. Some more disciplined and credible states regarding debt financing, such as the Netherlands, Germany, and Finland, have agreed to guarantee a significant share of these funds—in exchange for compensation for the risk involved—even though their borrowing rates at the time were still negative.
Regarding defense, Roland Gillet discussed the ReArm Europe Plan, seen as a step toward ensuring peace, but which remains modest compared to the Union’s military funding needs and, most importantly, is unlikely to produce long-term productivity gains or offer a return on investment.
When addressing the new stability pact, he mentioned it allows for a 7-year period (4 + 3 years) for countries with excessive deficits to return to compliance, warning about the Europe’s desire to "save everyone" at any cost, under the motto "whatever it costs," which gives the population a false impression of gratuitousness, along with all the associated dangers.
He concluded by emphasizing that the power of the United States lies in their geopolitical and military supremacy, but which is primarily sustained and reinforced by investments in scientific research and technology. Conversely, Europe suffers from its rising debt, mainly financing social and environmental expenditures that are not oriented toward creating value, and from a lack of genuine unity among its member states. To avoid excessive military expenses, it would be advisable for Europe to negotiate intelligently with the U.S. and focus on productive investments to strengthen its long-term growth and competitiveness.
Find more details about the event on the Ecofin Club website.