Trump bites. Europe grasps for an antidote.

So there's been this sudden switch in the conventional wisdom around Brussels. I mean, let's look at Greenland. Trump talked about it in his first term didn't actually do anything. Talked about it, you know, pretty much even before he started his second term a year ago, didn't do anything. Everybody was like, "Yeah, you know what? The guy likes to talk, 51st state stuff. It's fine, he's not going to do it. There's nothing Europe really needs to do." And then he like abducted the leader of Venezuela and put him in a jail cell in New York City. And suddenly people were like, "Oh, not only is he going to do it, but if he wants to do it, there's nothing we can do about it." Our guest on this week's episode of EU Confidential is going to push back on what she calls the politics of inevitability. He's going to say there's an antidote to Trump's chaos. Arancha Gonzalez-Laya is deeply entrenched in the global order that Trump is dismantling. A former Spanish foreign minister and previously an EU trade negotiator, she's now dean of the Paris School of International Affairs at Ciance Poe. Her voice is familiar to regular listeners. I spoke to her this summer, right after the EU agreed on a deal to reduce Trump's monster tariffs. Back then, she described Europe as limping along, struggling to adapt, but at least learning how to understand Trump. Now she says it's time to put those lessons into practice, with concrete steps, admittedly complicated ones, that can counteract the contagion of Trump's brutal approach. I'm Sarah Wheaton, host of EU Confidential. Later in the episode, we'll go closer to home, literally, with a look at the EU commissioner for energy and housing. See what I did there? It's the next installment of our Burle Malt-Hus-Hus series, introducing Dan Newarkinson. Oh, and there's going to be an Elvis reference, so stay tuned for that. But first, Arancha Gonzalez-Laya. Okay, so Arancha, when we last spoke, it was a summertime, we were in the Alpine retreat of Alpah. But even then, you said Europe was, and I quote, limping along, just sort of hoping to survive the Trump era. We had just seen what was a very uneven trade deal. There was this idea that we just had to do what we had to do to keep Trump on board for Ukraine until Europe could get its act together in this new might-makes-right world. So, do you see any signs that Europe is up and running, or are we about to fall really hard? No, I think the reality around us is moving much faster than our ability to adjust. And what we have to keep in mind is that we have an antidote to what is happening. What is it? We do not necessarily need to be following events. We can, the best antidote we have, is to move forward on our agenda. Because this is part of the deterrence capacity of the EU, is to tell the world that it is moving forward, that it's integrating its market, that it's integrating its energy system, that it's moving ahead on investments and savings union, and that is moving ahead on defense. This is, you know, the antidote for Europe is to talk less and to do more. Because the doing more will help build the European deterrence capacity that is so necessary in a world where, again, might is right. So, what are the ingredients in this antidote? You mentioned kind of creating an alternative European sort of stock and savings market. What else is part of that? So, there are a few components. Let me start with those that I think are perfectly doable for the EU, is integrating its energy market, because energy is a big weapon today and the hands of those that want to weaken others. As we have recently seen, the energy mixes in the European Union member states, some doing a lot very advanced and renewables like my own country is paying, some very advanced or nuclear like France, connecting all these markets to make sure that we lower the cost of energy across the EU and we are less dependent on those who want to weaponize fossil fuels is a no-brainer and it does not require massive change, it requires this clarity on the side of our leaders that this is the move to take now. The second one is the European internal market, again, for every percentage of further integration of our market, for an additional percentage that we depend on our internal market, we become less dependent on foreign markets, we become more capable of resisting the coercion that is also happening on the economic space. So, you know, good news is we have the antidote. Now, bad news is that in my view, we are surrounded by what I call the politics of inevitability that makes everyone believe, including ourselves, that the race is sober, that we've already lost. We have not lost, we will lose if we don't get going. Well, I mean, you do make it sound a bit easy, oh, you know, we just integrate these markets a little more, but I mean, we're seeing Europe still reluctant to move forward even on things like trade, which is theoretically a strong suit. So after 25 years, EU capitals finally signed off on the Mercassard trade deal, something that Spain has always been very in favor of because it would be opening up European markets in big countries in South America, but we're still seeing resistance from the European Parliament, which wants to try to block the deal, we're still seeing resistance from some capitals, which are threatening to take Brussels to court over Mercassard. On the other hand, that would be a way for Europe to have influence in kind of Trump's backyard. So, what are some of the holdups here? Yeah, I mean, the holdup is the politics, and probably the necessity to do a little bit of a better outreach to those who are afraid. This is a deal that has an economic component, and on the economic component side, it basically is we open our markets a little bit more, Mercassard countries open their markets a little bit more. Let's say that we already have trade with Mercassard countries, it's not as if we were inventing something new, is that we will lower the cost for our exporters to be present in Mercassard markets, and for them to be present in our markets, and the conditions that are clearly stipulates it in this agreement. So, I hear very often in Europe, you know, we are selling European agriculture for European cars. No, we are in Europe, agriculture is a net exporting sector. We can't compete, but for the part of the agricultural sector that we have more sensitivities, and we have more weaknesses, this agreement provides the necessary safeguards. This part of the market will not be flooded. So, from the economic point of view, it provides opportunities and provides safeguards against destabilization. And let's make one thing clear, this is not about substandard products entering the EU market. The EU does not allow substandard products entering into its own market. The protection of consumer comes first. But then this agreement, it's so interesting that it took place exactly when the events in Venezuela were unfolding. And it's also important because it's a different geopolitical signal. It's the signal that the game the Euro wants to play is the game of negotiating an agreement and agreeing with partners, treating other countries as partners, not imposing conditions on partners. And this is an important also geopolitical. So, it's economic and it's geopolitical. And this is why it's important that we have a serious discussion and debate. I understand that Mercosur is difficult for many farmers in Europe. Let's have a serious discussion with them. The European Commission has put additional support for farmers in Europe, for the next European budget. It's an important signal, we are not reducing protection to our consumers to give a boost to imports. But we need to strengthen relations with partners around the world that will help us also build the resilience that we need to resist in this new world of coercion. Speaking of coercion, we barely had time to digest Trump detaining Venezuela's President Maduro before he started talking about Greenland again. How serious do you think Trump is this time? Is this just more kind of bluster or is this a genuine plan to just kind of take Greenland over? No, it's difficult to speculate what the real intent is. But the fact that two allies in a defense alliance called NATO, talking thus manner, weakens the deterrence capacity of the alliance. And that is what worries me. So this military and defense alliance that is so important to the stability and the security of Europe, but also that of America, is weakened every time we put into question the method that allies should use, which is to discuss. Let's agree that the Arctic is becoming a more important geostrategic area. Let's agree that with climate change, the Arctic becomes this very important new corridor for trade, let's agree that this is an area where commerce, defense, and security converge. Let's agree that there is a lot of rivals of NATO that are very definitive in the space. And let's agree that, therefore, as allies, we need to pay more attention to this area. If the conversation were to take place in those terms, we would be projecting power at the moment, with the discussion that is taking place, we are weakening the deterrence capacity of NATO. That is what worries me. So by all means, let's pay more attention to the Arctic. I think we should. I don't think we are paying enough attention to this region. Let's do this as allies that we are, and let's do this in a cooperating manner, because in an alliance, if it's under duress, then there is no alliance. At this point, should Europe be thinking about some deterrence against Trump? Well, the antidote, I hesitate to call this the antidote against Trump. I think the antidote against coercion is strengthening the EU, and this means, obviously, security and defense. And there also things are moving forward. The EU is not just sitting, twiddling their thumbs. The EU, and the states, the European institutions are working to, in a few areas, whether it's in consolidating a single market for defense. We don't have an internal market for defense products. We have a plan to do that. We are working on strengthening the technological base of Europe. I've been following with a lot of interest what three big European companies, Erbas, Thales, and Leonardo, have been doing quietly to consolidate, for example, their technological capacities in the space, a space is like the Arctic, another one of these new frontiers. And let's say that we also have work ongoing in terms of mobility and procurement. So the best antidote for a world where coercion is the norm is to strengthen yourself, is to build your capacity to resist those that want to push you. A defense commissioner, Andreas Hebilius, has once again floated the idea of a European army and a European security council. We also, I just saw some reports that, Commissioner President Ursula von der Leyen told members of the European Parliament that Europe is trying to become a military powerhouse. Do you think this could actually materialize? Well, the irony is that Europe has significantly up its own game of security and defence, is that that's in NATO. European armies in NATO are already in numerous spaces around the European Union, in numerous missions defending the borders, deterring enemies in the borders of the European Union. But it's just that we probably need to project this as a concept. And therefore, I don't think it's a bad idea to project a concept which says we will do this together. We will do this as Europeans in an army that works together. I mean, we are today doing this with our own flags under the NATO flag. We could very well do this under a European flag. And I think at this time, the narrative and the projection of the project matters to drive energy towards that. I still remember the frowning when the idea of the euro was launched. And the idea made its way forward. Well, maybe this is the moment when this idea of stronger European defence, not because we want to attack, but because we want to deter those that would want to address the European Union or coerce us into actions that we are unwilling to take. I mean, this is the moment to have this vision of us together defending each other together. Let me stress that a bit. Would Spaniards really be ready to say defend Poland under a European flag without, you know, something like NATO's article five? Well, let's face this, Spanish military are already present in many of these missions in Baltic countries, in the eastern flank. They are already doing this. So right now is under a NATO flag, because there is an alliance with rules of engagement. So I don't see the difficulty in the same Spanish soldiers defending the same territory of the European Union under a different flag. It's just that we need to figure out what are these rules of engagement. We talk a lot about whether Europeans are ready to defend themselves. What I can say is that I have seen Sarah, European soldiers defending stability, peace democracy in places like Iraq, in places like Afghanistan granted. It was under missions that were commanded by NATO and this is important because it provides for clarity on rules of engagement, but the commitment, if this is what we are questioning, I think the commitment is there. We need to take a quick break, but we'll be right back. Stay with us. I'm going to switch gears. Let's talk about Iran. We're seeing huge anti-regime protests, a violent crackdown, and Trump openly encouraging the protesters, even hinting at military strikes. Europe, meanwhile, is debating more sanctions, including whether to designate the Iranian Revolutionary Guard Corps as a terrorist organization. Does any of this have a real impact? Well, I think what we are saying is the Iranian people, and it's very interesting to see that it's not just in cities, it's in cities, and in rural areas, it's not just women. Like in the past, this woman is man, is a lot of young people, and I think they may have different reasons for going to the streets, but they have one that unifies them is that this is a moment where the economy is not functioning in the manner they would expect. Maybe in the past, they were ready to accept less on freedom or more instability, more on prosperity, but right now, this deal is broken. These are massive demonstrations, it's not like in the past, something has changed. This is now a national movement, and the question we should ask ourselves is how can we best support the efforts at making sure this does not end up in a bloodbath, which is where, for now, seems to be heading. And we have to do that, being very clear-eyed, because Iran is an important country in a region that has seen a lot of tumultuous events in the last period where, in a way, balance of power is changing, as shifting, but where the goal over and above should be to provide stability, not to generate greater instability. So I mean, I guess what I hear you saying is that you don't want to see the regime be toppled quickly. But this is not for me to decide I would want to see an Iran where the citizens in Iran decide what kind of political system they want, that's what I would like to see. But what I'm saying is that we have to be cautious, in my view, about military interventions that do not take into account the impact this would have on the population. This is a big country, it's an important country. I think what they are saying is that they want change, and I don't think this is going to go away. So my sense is that we should be supportive of getting the change to happen, but not contributing to the violence that we are seeing in the streets of Iran that is frankly shocking. So what is Europe's role ultimately? Is there a concrete action that Europe should be taking or a more just kind of moral support? It's difficult to see, you know, we've seen previous episodes of countries, you know, the other population want to change, we've seen Arab Springs around the world in the past. And we have seen some of them succeed, and we have seen some of them not succeed. So I guess we should take a bit of lessons from the past. This is in a way a movement from within, and when there is a movement from within, it's important to help this by supporting this transition takes place. And today this is very much an Iranian issue. What we can't do obviously is make sure that we don't support for the violence, that we don't support for the repression, that we don't encourage that. In my view, we can do in their ways to do that, whether it's politically or whether it's economically, and whether there is working with others that would want to work to stabilize the situation. And I'm thinking a lot about countries in the region. Well, yeah, I mean, that actually leads me into my other question. You know, you're teaching students at Siamspot, and has this situation forced you to rethink how you teach geopolitics? Are you still teaching the rules, or are you teaching people how to survive without them? Yeah. This is a great question, Sara. Actually, I'm in the US because we had a gathering of schools of international affairs around the world association that I chair. So we had this discussion, and you know, you have one part that would tell you is very important to look at the theories, to look at the methods, to look at analyzing and trying to derive some methodology. But there are others that tell you, but in the end, it's three people in a room, and they will be the ones making the decisions, and then you've got to deal with this. So I guess my sense, and that's just a bit what we try to apply at Siamspot in the Paris School of International Affairs with this amazing crowd of students that we have from all around the world. What we try to do is make sure they know how to leave no stone and turn, how to look for the nuances, how to be critical about what's happening, and how to always find a way to deal with it. Not to give up, not to think that it's doomed, not to think that it's finished. So these two elements, learning to see the nuances, the differences, the challenges, but also looking at, you know, empowering them, for them to be able to shape, not necessarily to just be observers, but to be shapers. Yeah, that's the challenge. It's an amazing challenge, it's a great crowd, and it's a pleasure to be with them because in the world that sometimes looks very zero-sum, they are a reminder to me and to my colleagues that the world is not zero-sum game, that there is an amazing capacity and incredible possibilities to make this win-win. All right, well, Kreda, where do that question was dreamed up by the producer Dionis, and he and I both thank you for joining us today. Thank you. Thank you, Sarah. Okay, that was Arancha Gonzalez-Laya, and if you're teaching or studying geopolitics right now, yes, it might be harder than it used to be, but at least it's never boring. And now we're turning to our Berlin Mountain Who's Who series to look at Dan Jorgensen, the European Commissioner for Energy and Housing. To talk about what his portfolio tells us about where the EU is placing its bets at a moment when energy security and affordability are back at the top of the agenda, I'm joined by my colleague, Eitor Hernandez Morales, who's been following Jorgensen's time at the commission and before. All right, so Eitor, let's just start with the basics, who is Dan Jorgensen, and what should we know about him? Yeah, so Dan Jorgensen is a seasoned hand from Denmark. He is a lifelong social Democrat. He studied there and in the States and was an energy and climate leader very early on. And he is a former long-term member of the European Parliament, where he was the head of the NV committee before going back home to Denmark and really getting his hands into domestic politics there. So long-time minister for fisheries, but really where he stands out is on energy and climate. And something we're interested here at EU Confidential, he was a podcast host, right? He was indeed, he hosted a podcast called Planet A, and yeah, he's a huge defender of the spoken word. All right, and you interviewed him recently. What was his vibe? How did he come across? He seems like a pretty fun guy, a pretty serious guy. He has some very clear passions and, you know, he's an interesting character in that it's hard to define a come to Jesus moment, especially when it comes to housing, but it seems like he assumed his commissioner's mandate really focused on the energy portfolio, but during the last year, there's been some kind of switch, which even he wasn't able to fully explain, but he's become just this really, really passionate, affordable housing warrior. And according to him, one big part of it is just seeing the impact that it's having on young people. And we actually have a clip from that interview that we can play here. The average age of when people leave their parents home, now you can joke about it as I sometimes like to say that I love my parents a lot, and I hope it pretty sure goes the other way around also, but I was 19 when I left and we were both ready for that to happen. That's, let's put it back in here. And so that's a joking way of saying that staying at home to too many years is not a good thing. A more serious way of saying it is that if you're forced to live with your parents longer than you should prevent you from getting the education that you want to job, that you want to training, that you want to start the family, that you want to live their life, that you want to postpone a very important part of the start of your adult life, so to speak. That is just a huge problem and I totally understand if people are reacting against it. Something else that struck me is that he really, when I say that he takes it to the personal level, one of the things he talked about is that he lives in this kind of upscale, flashy development in Copenhagen with these beautiful buildings and he was talking about the fact that within that neighborhood there are tons of social housing buildings and you cannot tell the difference between them and the luxury apartments and he was saying that should be the goal for Europe. We need to create high quality affordable housing that allows for social mixing, but that is accessible for absolutely everyone. Well, indeed you interviewed him about the EU's affordable housing plan and you've come on this podcast to talk about Europe's housing crisis, how the EU is trying to get involved. This is that, what's the overview of this affordable housing plan? I mean, look, it seems that Brussels really has gone in the message that this is one of the key political issues of the day. It is something that is deciding elections at the local, regional, national, and European level and it reflects that broader cost of living crisis that is leading a lot of European voters to conclude that mainstream parties aren't attending to their needs. There's a very big need for a wake-up call for decision-makers in Europe, but regards to housing. It is a real crisis and it's not enough to just talk about it. I just heard recently, all that was press release song there, a little less conversation, a little more action, please. I think that having a roof over your head at Decent House is a human right and we don't consider that like that today. If we don't do something about this problem, people will react. It plays very well, unfortunately, into the playbook of the right-wing populists, right and left-wing populists, so the populists that exploit social unease and social problems for their political benefits. So concretely, what are some of the top proposals? The key thing that we have to understand before we get into the concrete proposals is that EU officially does not have a mandate over-housing. So what this plan is is essentially Brussels acknowledging that, but also saying, "We're going to give you guys every possible tool to address this and let's see how you guys do." Essentially, like the commission has said, "It is now your problem because we have given you everything you need to do, so if you don't. " You being the capitals. The capitals, the national governments, if you don't do anything, the voters will know who to blame for this. In terms of the actual plan, one of the biggest things is something that a lot of capitals have been asking for for ages, which is this big revision of state aid rules. Up until now, state aid's public money could only be used for the lowest-income groups in society. Essentially, what this does is recognize that the housing crisis is no longer a problem for the poorest members of society, but rather is affecting the middle classes, is affecting a much broader range of EU citizens, and so it liberalizes those rules so that national governments can use public funds to really invest in public housing products. Another big novelty is this upcoming strategy for housing construction. Now, I know that sounds very boring, but it's actually super practical, because basically what this is going to do is make it a lot easier for both materials and workers to move across the EU to build housing. A brick in Poland will be able to easily be used for a house in Spain, a worker in Austria will be able to cross over to Italy and to construction there, and what we're going to have is harmonized qualifications, we're going to have harmonized measurements, and the theory is that in this wonderful single market that we have, we're also going to have a single market for construction, and that's going to make it cheaper, easier, and faster to build, build. Of course, the other kind of bogeyman that we talk about a lot when it comes to rising housing prices are short-term rentals, the Airbnb's of the world, does this plan tackle those at all? Yes, absolutely. So, what you're going to point out is that in some housing markets, short-term rentals now account for up to 20% of the houses, and obviously those are no longer accessible for people who live in these, especially popular European cities, you're around, so we're talking about places like basically every European capital, but also tourist hotspots, like Barcelona, like the Greek islands, etc. On one hand, it's important to say that I'm not on the side of the people who say just ban short-term rentals, because I actually think that's many valuable things to say. It can give an income for people that need it to stay in the home, that they are. It helps us all get better opportunities of experiencing each other's countries, at least to tourism and jobs, and all that. Fine. But, on the other hand, the growth has been, I think, in a rate that nobody could have imagined, has become more or less a money machine in many places instead of what it was intended to. So, what he is doing with this plan is he is announcing that the commission is going to come out with a legislative act, this year specifically targeting this phenomenon, and that that legislative act will have a series of tools that cities, regional governments, and national governments can adopt to limit short-term housing. What tools? For example, one would be imposing caps on the number of nights that particular apartment can be rented out in that way. Another option is to put seasonal limits, and then it would also give EU backing to plans to either call for temporary or potentially even permanent halts on new licenses. Has there been any reaction from the industry to the plan? Yeah, I mean, it's funny. The industry actually got in touch with us ahead of the plan, and they were complaining that this plan was going to be an act of overreach that this release should be left in the hands of local governments, because they're the best ones to know, and it's very clear that you're going to say and anticipate that because the plan literally just gives tools for local governments to adopt, and he kind of bends over backwards to say, like, Brussels isn't in any position to decide what Barcelona should do, but we're going to give them every possible tool, and that way, if they don't adopt them, people will know who to blame. So let's switch back to what you said was kind of his original passion than the other part of his portfolio, which is energy. The biggest headline here has been ending imports of Russian gas. Where do you think stand on that? Jorgensen can certainly take a victory lap with that. It was in December when he rolled out this revision of the Repair EU program, and basically what the EU has announced is that from September 2026, LNG imports will be completely phased out. So it's a pretty big deal. We have to keep in mind that the EU has been weaning itself off Russian gas ever since the invasion of Ukraine. Russian gas imports accounted for 45% of what the EU consumed at that time back in 2022. And today it only accounts for 13% and the idea is that we will reach zero by 2027. So he's been widely praised for this, and it's clear that this is an issue that is near and dear to his heart. And last question. We've had you on here talking about housing and the politics of housing in Denmark specifically and the crisis among the socialists. Do you see Jorgensen wanting to go home and have some ambitions, especially if they're sort of a host, Fredrickson era? I mean, certainly when I was in Copenhagen, his name was mentioned. That's funny because even in the most famous Danish export, Morgan, they actually have an episode where someone is punished by being sent to become a commissioner in Brussels. The title of the episode is that in Brussels no one can hear you scream and the idea is that you vanish from domestic politics when you go off. And yet Jorgensen's name is mentioned in Denmark quite a bit. He is seen as a pretty serious politician and a guy who is being very proactive. We'll see. We'll see what happens. All right. I tore Hernandez Morales. Thank you so much. And that's it from us this week. If you haven't already, make sure to follow EU Confidential wherever you get your podcasts and leave us a rating or a review. If you have thoughts, comments, or ideas for guests and topics, you can reach us at [email protected]. Thanks to Diana Sturis, our senior audio producer, and web producer, Ellen Bono. I'm Sarah Wheaton. See you next week. [BLANK_AUDIO]