Europe at risk of becoming a ‘geopolitical playground’ warns Croatia’s former president, and says Trump’s 2018 NATO threat was justified

At the Fortune Global Forum, former European leaders underscored the continent's critical juncture regarding strategic autonomy, defense, and economic future, warning of an existential choice between becoming a global player or a 'geopolitical playground.' Former Croatian President Kolinda Grabar-Kitarović criticized Europe's historical over-reliance on the U.S. for defense, despite a new commitment to spend 5% of GDP on defense by 2035, while former Italian PM Matteo Renzi lamented Europe's 'lost momentum' due to bureaucracy and a lack of vision. The EU's anemic 0.1% GDP growth in Q2 2025 highlights the significant economic challenges that could impede its ability to achieve true independence and maintain global relevance.

Analysis

Europe faces an "inflection point" in 2025, navigating geopolitical conflicts, its relationship with the U.S., and the integration of AI, as warned by former Croatian President Kolinda Grabar-Kitarović. She emphasized that these "existential choices" will determine if the region becomes a global player or a "geopolitical playground." This highlights significant long-term strategic uncertainty and potential for regional instability.

The continent is addressing its historical over-reliance on U.S. defense, with NATO allies committing to invest 5% of GDP annually on defense by 2035. However, Grabar-Kitarović criticized the seven-year delay in this commitment, following former President Trump's 2018 warnings, indicating a reactive rather than proactive strategic posture. This long-term defense spending increase, while substantial, faces questions regarding its timely implementation and effectiveness.

Economically, the EU's "measly 0.1%" GDP growth in Q2 2025 underscores its fragility, which could impede its strategic autonomy. Former Italian Prime Minister Matteo Renzi attributed Europe's "lost momentum" to Brussels' over-regulation and a lack of vision. These internal structural issues and economic underperformance present significant headwinds to Europe's aspirations for greater independence and global influence.

Key Decisions for Investors

• Monitor European economic indicators, particularly GDP growth and regulatory reforms, as the "measly 0.1%" Q2 2025 growth and concerns over bureaucracy suggest underlying structural challenges.
• Evaluate defense and security sector investments in Europe, considering the long-term commitment to 5% GDP spending by 2035, but be mindful of the slow implementation and potential for bureaucratic hurdles.
• Assess geopolitical risks and policy shifts, as Europe's strategic choices regarding its global role, relationship with the U.S., and internal cohesion will significantly influence regional stability and market sentiment.