France: Geopolitical Ambitions, Empty State Coffers
To what extent are France’s current economic troubles linked to its geopolitical choices? Although France is by far the European Union’s leading agricultural producer, with agricultural output worth approximately €93.8 billion in 2025, rising agricultural prices are particularly noticeable there.¹ What does the government have to offer? Very little.
Record levels of borrowing and the mounting cost of servicing an already excessive public debt have severely restricted its room for manoeuvre. The government’s interest bill is expected to reach around €65 billion this year, exceeding budgetary allocations for either education or defence when individual budget missions are compared, excluding civil servants’ pensions. Meanwhile, the growth forecast for 2026 has been downgraded to just 0.4%, while the Banque de France expects unemployment to reach 8.4% by the end of the year.²
Yet the French president remains eager to lead the Coalition of the Willing in a conflict in which NATO is waging war against Russia under the pretext of defending Ukraine, while Russia is fighting NATO under the pretext of protecting Ukraine’s Russian-speaking population.
At the same time, Macron insists that France has nothing to do with the conflicts in the Middle East or the confrontation with Iran, even though French armed forces are actively involved in defending American allies, from the eastern Mediterranean to the Persian Gulf — provided those allies are victims of Hamas attacks or retaliation by Hezbollah and Iran.
He also insists that France bears no responsibility for Ukrainian attacks on Russian oil refineries, which have contributed to diesel shortages.
And yet France’s direct military assistance to Ukraine alone has amounted to approximately €6.5 billion since 2022 — roughly the same sum that, after numerous unsuccessful attempts, Macron now intends once again to extract from the pockets of pensioners and patients.³
After all, the state coffers are desperately empty in a country where poverty reached a historic high in 2024: 9.8 million people, or 15.4% of the population, were living below the poverty line — the highest level recorded since comparable measurements began in 1996.⁴
Germany: How Europe’s Industrial Engine Ran Out of Fuel
And how have those same geopolitical choices affected Germany and European industry as a whole?
Within the much-vaunted Franco-German “engine of Europe”, Germany is the undisputed industrial powerhouse, accounting for approximately 26% of the value of the European Union’s sold industrial production — more than a quarter of the total.
Yet in 2022, when the civil war in Ukraine escalated into an interstate conflict, Europe’s leading industrial power decided to saw off the branch on which its industry was sitting: it abandoned cheap Russian energy in favour of more expensive alternatives, including American liquefied natural gas (LNG).
Then came the war in the Middle East, the closure of the Strait of Hormuz and the Bab el-Mandeb Strait, Ukrainian attacks on Russian refineries and the diesel crisis — all further driving up the costs of oil, gas and transport.
German industry now faces higher energy costs than its main competitors, while energy-intensive sectors are losing the competitive battle.
Between February 2022 and March 2026, production in these sectors fell by 15.2%, while overall industrial output declined by 9.5%. Chemical production dropped by 18.1%, and paper manufacturing by 18.5%.⁵
More than 17.5 million Germans — over one-fifth of the population — are at risk of poverty or social exclusion.⁶
Europe Loses Industry, America Sells Energy
As a consequence, Europe’s share of global manufacturing value added fell from 20.8% in 2000 to 14.3% in 2024.
Following the energy shock, around half of Europe’s primary aluminium production capacity was out of operation, while the chemical industry continues to operate well below its historical average.
At the same time, Europe is losing the technological and manufacturing race against China and becoming increasingly dependent on imports of critical raw materials, components and technologies.
Meanwhile, the United States has become the world’s largest exporter of LNG: what drives up costs for European industry boosts export revenues for American producers.⁷
Like Macron, Merz insists that he bears no responsibility for this disaster.
Putin and Trump are to blame.
Wars Are Not the Endgame, but Instruments for Redistributing Power
Yet it is perfectly clear that Europe’s elites have drawn themselves into a major geopolitical game in which wars are not ends in themselves, but instruments for reshaping the balance of power in the regions where they are fought.
What is at stake is not merely territory and security, but energy, industry, money and the question of who will set the rules of the new regional order once the fighting ends.
In this sense, European elites have turned the war in Ukraine into a test of their own geopolitical credibility.
Continuing the war has become politically more advantageous than acknowledging its cost.
The crucial question is no longer who will win the war, but who will survive the peace — and why the elites are so afraid of it.
Why Do Europe’s Elites Fear Peace?
The former great powers — Britain, France and Germany — simply cannot afford to lose Ukraine.
The return of a pro-Russian government would open up a potentially disastrous prospect for them: the unification of two battle-hardened armies, Russian and Ukrainian, whose combined strength European armed forces would struggle to match.
If Germany and Japan became America’s most loyal allies only after being defeated by American bombs, and Churchill came close to launching a Third World War before the Second had even ended — against his own ally, Russia — then such a geopolitical reversal is hardly beyond imagination.⁸
Notes and References
- Institut national de la statistique et des études économiques (INSEE), “Production et valeur ajoutée de l’agriculture,” July 28, 2026.
- Banque de France, “Projections macroéconomiques intermédiaires – Septembre 2026,” September 15, 2026.
- Sénat, Financement des déploiements opérationnels des forces armées françaises à l’étranger, 2026. The French Senate report estimates the value of French assistance to Ukraine since 2022 at approximately €6.5 billion. This figure covers different forms of assistance and different time periods.
- INSEE, “Niveau de vie et pauvreté en 2024,” Insee Première, no. 2117, July 9, 2026.
- Statistisches Bundesamt (Destatis), “Energieintensive Industriezweige mit Produktionsrückgang um 15,2 % von Februar 2022 bis März 2026,” May 15, 2026.
- Statistisches Bundesamt (Destatis), “Deutschland in der Europäischen Union: Kennzahlen 2026,” 2026.
- U.S. Energy Information Administration, “Global liquefied natural gas trade volumes reached record high in 2025,” July 14, 2026.
