In his New Year’s address, German Chancellor Friedrich Merz warned that Europe faces mounting threats from Russian aggression, global protectionism and shifting relations with the United States. Since taking office in May, Merz has positioned Germany at the forefront of European efforts to support Ukraine and has overseen a significant increase in defence spending to signal Berlin’s readiness to take on greater responsibility for continental security.
Merz described Russia’s war in Ukraine as a direct threat to Europe’s freedom, citing daily incidents of sabotage, espionage and cyberattacks targeting Germany. He also highlighted economic pressures, including Europe’s dependence on imported raw materials and the strain on Germany’s export-driven economy, which has struggled amid weak growth, limited domestic reform and rising global trade tensions.
Why It Matters
Merz’s speech underscores a broader shift in European thinking about security and economic resilience. With U.S. President Donald Trump back in the White House and pursuing protectionist trade policies, Europe can no longer assume Washington will remain its unquestioned security guarantor. This reality is pushing European leaders, especially in Germany, to argue for stronger strategic autonomy in defence, trade and industrial policy.
For Germany, Europe’s largest economy, the stakes are especially high. Continued economic stagnation after two years of contraction risks weakening Berlin’s influence in Europe just as it is being called upon to lead. Merz’s call for Europe to “assert its interests” reflects both geopolitical urgency and domestic economic pressure.
What’s Next
Germany is expected to continue increasing defence investment and pressing for closer European coordination on security, supply chains and trade policy. Efforts to reduce economic dependence on China and to shield Europe from global protectionism are likely to accelerate in 2026.
At the European level, Merz’s message points toward a year of tougher strategic choices, as the bloc balances support for Ukraine, economic reform and a more self-reliant relationship with the United States. Whether Europe can translate this rhetoric into concrete policy shifts may determine its stability and prosperity in the years ahead.
With information from Reuters.
