At the Conversations pour demain event marking the 25th anniversary of Institut Montaigne, ECB President Christine Lagarde argued that independence in today’s interconnected world depends less on military or regulatory strength alone and more on mastering “system power” – the ability to manage dependencies created by global infrastructures and technologies.
Key points:
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From hard to soft to system power: Lagarde traced Europe’s evolution from military “hard power” to post-war “soft power” based on rules, and now to “system power,” where leverage comes from control over supply chains, technologies, and critical resources.
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Europe’s vulnerability: Europe prospered in the rules-based order but is not fully prepared for system power dynamics, as shown by reliance on Russian energy, weak progress on chips, batteries, and AI, and fragmented defence and digital policy.
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Three priorities:
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Pooling: Shift critical technology and industrial policy to the European level with qualified majority voting to achieve scale.
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Coherence: Strengthen Europe’s full range of tools – economic, financial, defence, and energy – so that vulnerabilities in one area do not undermine strength in another.
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Coalitions: Reinforce global institutions like the IMF and WTO, while also forming flexible coalitions (including with rivals where interests align) to secure resources, technology, and digital infrastructure.
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Strategic autonomy: Lagarde stressed that Europe must reduce asymmetric dependencies to make coercion self-defeating. Progress is visible – from increased defence spending to support for Ukraine and work on the digital euro – but indecision and fragmentation remain obstacles.
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Conclusion: Europe must act before crisis forces its hand. Stability in the 21st century will come not from dominance, but from turning shared vulnerabilities into shared strengths through a new concept of strategic balance.
Core message: To safeguard independence in an era of system power, Europe must pool sovereignty, align its policies, and build strategic coalitions – moving from a reactive to a proactive balance of power.
