Lorenzo Bini Smaghi’s account of Europe’s headaches provides a clear-headed compendium of the challenges facing the continent – and a sobering reminder of the outcome should it fail to tackle them.
‘Da soli: Gli europei alla prova di Trump nelle sfide dell’economia globale’ (‘Alone: Europeans tested by Trump in challenges of the global economy’) adopts as its backcloth the US paradigm shift in international relations.
Bini Smaghi is a well-rounded, Florence-born monetary technocrat who can put into historical context the US’s retrenchment from post-second world war co-operation within the framework of Nato, the World Trade Organization and other pillars of the multinational order.
A former Italian finance ministry official and board member of the European Central Bank, Bini Smaghi was chairman of French bank Société Générale for 11 years, stepping down in May 2026. His book argues that the Donald Trump administration and its policy agenda are only the latest and loudest manifestation of deep-seated international changes. He warns against a superficial narrative minimising the costs of European adjustment and curbing a necessary sense of urgency for a deep-rooted European mindset change.
Moves by previous US administrations (such as Joe Biden’s strongly protectionist Inflation Reduction Act) have resulted in a longer-term transition to a world where global competition with China becomes the main factor shaping US strategies.
A wasted opportunity
The Trump administration’s break with the post-war system could have been, for European leaders, a blessing in disguise. But Bini Smaghi argues that, with few exceptions, the opportunity has been wasted. European political leaders continue to harbour a semi-nationalistic spirit that fails to hand more clout to the Union at levels necessary to ‘become an alternative point of reference on the global scene’. He terms the EU as a ‘hostage of a teenage fear to take decisions on its own… it struggles to take on the duties of full autonomy.’
The main problem, for Bini Smaghi, lies in the EU’s decision-making structure. The Union holds exclusive powers on levels such as currency, trade and competition, but not on others (such as defence, industrial policy, security and taxation) that can provide geopolitical leverage.
The dire political and strategic limits of such a two-headed structure – the ‘incomplete nature of confederal Europe’ – make Europe vulnerable to accusations of irrelevance. Fragmentation ‘enormously limits Europe’s role even where it would have a role comparable to its economic weight.’
Standing up to the US
For Europe to become a fully-fledged political project, member states must give up their veto powers and transfer sovereignty to the bloc at levels where the unanimity system has hitherto enabled them to protect national privileges. Bini Smaghi points out that last year’s trade tariff negotiations with the US involved different policy fields – some of which fell under member states’ competence – curtailing Europe’s ability to act strategically or marshal retaliatory measures.
The EU, the author argues, had all the tools to set up a different trade deal, thanks to the Commission’s competence in trade and ability to take anti-dumping and anti-coercion measures. But it failed to take that route. Similarly, retaliatory tariffs would have been useful for the EU to beef up its budget and fund resources for strategic sectors such as defence and technology.
From that angle, the pact signed by Commission President Ursula von der Leyen and Trump marked more of a unilateral imposition from the US rather than a trade deal – especially as it came after the EU had already made concessions on military spending and on multinational taxation.
Overall, the deal gave the impression the Union is not willing to oppose US abuses, Bini Smaghi says. He terms it a ‘complicit contribution to the Trump administration’s efforts to deal the final blow to international trade accords’.
Bini Smagi records some brighter spots, notably after Trump started pressing on Greenland earlier this year. ‘The Greenland experience shows that when the EU manages to reach consensus, not only on exclusive competencies but across the negotiating table, it can win the game.’
Central bank independence and personal attacks
Bini Smaghi brings his policy background into sections of the book dealing with central banks’ autonomy. His analysis of the Federal Reserve’s and European Central Bank’s independence represents some of the book’s most cogent aspects. The author describes Trump’s attacks on former Chair Jerome Powell as an unprecedentedly grave development in the Fed’s history.
He cites frequent past tensions between US presidents and the Fed – Richard Nixon versus Arthur Burns, Jimmy Carter versus Paul Volcker, Ronald Reagan and George H.W. Bush versus Alan Greenspan. But the Fed had never been the target of direct and personal attacks from a president calling for its chairman’s resignation.
These assaults, Bini Smaghi says, hit at the core of the Fed’s anti-inflation policies and put the Fed’s credibility at risk. When expectations are de-anchored ‘it’s very tricky to rein them back at levels that are compatible with price stability – and [it becomes] very costly for the economic system’.
Bini Smaghi argues that the Fed’s perceived independence enables worldwide investors to continue to allocate to US Treasuries and the dollar as safe havens. If the Fed was to bend to political will – as happened with Burns, whom the author terms the worst post-war central banker – ‘US debt sustainability would be damaged and so would the centrality of the dollar’. It’s not a coincidence, he points out, that gold prices rose and the dollar dropped as Trump intensified his anti-Fed campaign.
National priorities prevailing over common interests
Bini Smaghi sees failures in Europe’s financial markets integration as emblematic of an enduring trend where short-sighted nationalistic mindsets prevail over common interests. National governments’ protectionist approaches continue to hinder development of a thriving pan-European savings and capital market, with unified rules and supervision.
He castigates politicians’ ruinous inability to understand the consequences of their opposition to lack of interest in Europe’s financial integration. This has caused ‘the desertification of European markets in favour of Wall Street’ and ‘the colonisation of what’s left by US operators’ – from origination to issuance, capital operations, trading and mergers and acquisitions. Increasingly European businesses are floating shares on larger and more liquid US markets.
US operators, especially in private equity, enjoy growing economic and political influence across Europe – which they use to oppose integration. All of this is in stark contrast with the EU’s goals. It creates severe constraints for the enormous investments the EU needs to mobilise in sectors pivotal for its aim of ‘strategic autonomy’.
‘While the EU gave itself a currency, it lacks a financial system to ensure its sovereignty.’ A confederal system based on member states’ veto rights displays the EU’s reality as a half-baked, ‘not fully formed sovereign political entity.’
‘If Europe wants to shore up its autonomy to ward off bullying tactics from other world powers, it needs to develop a global, non-sectorial, political vision.’ Instead, Bini Smaghi writes, political leaders proclaim commitment to common EU goals to then get their technical staff to find caveats against them.
Bini Smaghi concludes that, unless the EU moves to federal decision-making and ends veto power, Europe will remain a theoretical construct trapped in a permanent infantile state. He cites, semi-despairingly, one of the EU’s founding fathers, Belgian Prime Minister Paul Henry Spaak: ‘There are only two kinds of states in Europe: small states and small states that have not yet realised they are small.’
Anna Brunetti is an economic and financial news editor specialised in EU regulation.
‘Da soli: Gli europei alla prova di Trump nelle sfide dell’economia globale’ by Lorenzo Bini Smaghi was published by Rizzoli in April 2026.
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