Britain and Europe keep admiring their assets instead of deploying them. The competitiveness agenda and the security agenda are not competing claims on the same budget. They are the same agenda.
Professor Michael A Witt, Professor of International Business and Strategy, King’s Business School, and co-author
22 September 2026
Addressing Europe's 'worst case scenarios' - proposals from British-German expert roundtable
Participants were senior figures from government, industry, finance and academia in the United Kingdom and Germany. Those who have agreed to be named are listed in the report.
A new report publishes recommendations from a roundtable bringing together senior British and German figures to test two of Europe’s ‘worst case scenarios’: what Europe would do if the United States became an active adversary and what would happen if the European Union broke apart. It concludes that an effective response to both would largely mean addressing the same three domestic problems: energy costs, capital that is not put to work, and governments that cannot deliver.
The closed-door roundtable included senior figures from business, finance, government and academia in the UK and Germany, including the Bank of England, the German Bundestag and the European Bank for Reconstruction and Development. Its discussions form the basis for Europe’s Geoeconomic Future, published by King’s Business School and the Hanns Seidel Foundation UK.
The two scenarios were designed to expose Britain and Europe’s key weaknesses. The first scenario assumed a United States that has crossed from unreliable ally to active adversary, with NATO hollowed out and Ukraine lost. The second scenario explored was France leaving the European Union under a National Rally presidency and reintroducing the franc, prompting copycat moves elsewhere. Neither was a forecast.
Participants' judgements about how each scenario would unfold were specific. Under an adversarial United States, UK systems could begin to degrade within days if Washington withdrew access to GPS. A French departure would close markets the moment it was signaled, potentially for months; a newly reintroduced franc would depreciate sharply, and the redenomination of French debt could be treated as a default. Britain might serve as a relative safe haven, or might equally be pulled into the crisis. One participant suggested the trigger might not be an exit at all: a National Rally presidency could threaten to block EU business unless the Union agreed to issue common debt, so the rupture could arrive as a debt ultimatum rather than a clean departure.
Of the two, the break-up of the European Union was judged the more damaging, and the roundtable participants traced its cause inward: a politics that does not deliver, falling living standards and a pervasive lack of opportunity. That makes it a competitiveness problem rather than a constitutional one. The same domestic agenda therefore does different work in each scenario: against an adversarial United States it can only reduce the damage, while against disintegration it addresses the cause. "The most catastrophic scenario is also the most preventable," the report concludes.
The report argues that Europe’s failures are illustrated most starkly in its cost base. It highlights that the United Kingdom has lost its former energy-cost competitiveness: one participant reported energy costs for a single product running roughly five times those in the United States and twenty-five times those in China. Establishing an investment fund in the United Kingdom was estimated to cost about five times as much as in the United States. Across the European Union, industrial electricity costs two to three times the American price and gas four to five times as much, while some €10 trillion of household savings sits in low-yield deposits. “Europe does not lack capital,” the report states. “It misallocates it.”
Alongside these longer-term problems are vulnerabilities that could be exploited at short notice. Access to critical minerals is the clearest: the European Union sources some 98 per cent of its rare-earth magnets, which are used in applications ranging from clean energy to electronics and medical devices, from China. When Beijing tightened export licences in 2025, magnet exports fell by around three-quarters and several European carmakers halted production.
The report calls for the UK and Europe to address both immediate security risks and longer term problems in parallel; strengthening Europe’s Galileo satellite-navigation system, securing critical minerals and deepening UK–German defence collaboration now, while pursuing cheaper energy, faster planning decisions and normalised UK–EU trade over years. With around 80 per cent of one company’s production inputs sourced abroad, the report argues that frictionless trade with the European Union is a precondition of British competitiveness rather than a political preference.
We convened the room to stress-test shocks we assumed were beyond our control, and the discussion kept returning to energy costs, capital that will not move and the inability to build anything. Those are the things Britain and Germany can actually change, and none of them requires anyone else’s permission.
Dr Michael Martin Richter, UK Country Director, Hanns Seidel Foundation, and co-author
Read the full report: Europe’s Geoeconomic Future: Build at Home, Stand Abroad.
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Professor of International Business and Strategy