‍Part 1 of this essay laid out why Europe is in a corner: caught between a hegemonic ally turning hostile and a rising electro-state, exposed on energy, materials, capital and security all at once. The bind is existential. The transformation is not optional. This is the fundamentals of what doing it actually looks like.‍

In 1951, the idea of Europe materialized. Six countries pooled their coal and steel and made war between them materially impossible. The US underwrote Europe with the Marshall Plan, and with NATO, it built the beginning of deterrence, which large parts of Europe benefitted from. If the fossil fuels-based peace and security architectures inherited from 1945 are starting to crumble from the base, stretched too thin by acute security dilemmas piggybacking on the twin transitions, then the reflex may be to reach for the original instinct behind the founding of the European project: pool the materials, build the common base, let peace follow as the dividend. 

But 2026 is different from 1951. We are upstream from war and catastrophe, not downstream.

In Europe, modern guns are pointed at us from three directions at once. Russia is already attacking - kinetically at the edge, through sabotage, cyber, and systems-disruption everywhere else. China is not threatening Europe's industrial base; it is consuming it in real time, on the schedule of its own overcapacity. It is also rewriting the norms of the international system and organising them around new forms of stability, control and autarky with territorial reach. And the United States - the underwriter of last resort, the security guarantor the entire European project was built atop - is withdrawing the guarantee, and on its more hostile days, monetising its absence. It is also veering ideologically in a direction that is increasingly antithetical to democracy and sustainable social contracts. In short, the substrate of war is not lying in rubble waiting to be pooled. It is being weaponised against us. 

Because of this, the original logic of the peace and security architectures need to be inverted. Security can no longer be the dividend that economic integration eventually pays out. It has to be the load-bearing pillar that economic integration is built to serve and to feed. 

What survives from 1951 is not the sequence. It is the method. Schuman did not pool the materials of prosperity; he pooled the materials of war - the things you cannot rebuild an arms industry without - under a shared authority that no single nation could unwind. He neutralised a threat of the return to war by removing its substrate from national control. Europe now has to build the substrate of deterrence before the war it needs to try and deter arrives.

The method abstracts cleanly across the inversion: pool the substrate of the threat under shared sovereignty. In 1951 the threat-substrate was coal and steel, because the threat was European war. In 2026 the threat-substrate is energy and compute merged with ecological instability, because the threat is now systems war against the background of planetary overshoot. And here is the hinge: Europe cannot pool the full substrate within its own regional borders. The materials, the compute, the deterrent mass, the research base - no European combination contains them all. The conclusion is therefore not a preference but a structural necessity. Europe's security has to be pooled with that of other middle powers who come under increasingly greater threat as a result of the same permeating security dilemmas. Like Europe, they want to accelerate towards a world order with different rules - but rules nonetheless; and none of them can stand up for a new order alone. 

Other middle powers include Norway, Canada, Japan, South Korea, the UK, Australia, New Zealand, and India. These are the usual suspects in many respects. But there are others: countries like Mexico, Uzbekistan, Kazakhstan, Vietnam, South Africa, to name just a few. These are countries that may not share the same politics as Europe, but they share the same geo-strategic predicament, as well as incentives for rules of a different kind as we enter the age of the planetary. They are also countries with which Europe can start repairing history as we collectively walk into climate-disrupted futures that warrant different forms of partnerships, alliances, and visions. 

These are the countries whose pooled capacities - sectoral, industrial, research, compute, and security resources - represent the start of a new gravitational pole of cooperative power. They need to integrate on security-related imperatives, not trade integration alone. This means pooling industrial property, research, innovation and funding for the projects that build the muscle of deterrence and capability; and organising rules among allies that secure the pooling of resources in a way that builds trust. It involves cooperating on security matters beyond NATO and AUKUS - beyond them precisely because both route through a Washington that is now the variable rather than the guarantor. And it may involve, over time, preparing the ground for security agreements that become binding.

And while it may sound depressing to dwell on the hard-security and substrate aspect of peace and security architectures - seemingly, the exact opposite of preparing for peace and de-escalation - it is vital to say plainly that deterring the appeal of war is the first step towards building robust peace architectures. It is within the realm of a secure deterrence build-up that the future foundations of peace, norms and rules can be deciphered and co-designed for the age of the planetary - an age in which rules will need to ensure human, organic and artificial dignity, and re-organise economic interdependencies in the face of ecological ones. 

That work begins with the stack below - the start of a European reinvention that has many more chapters to it. But without these layers, the rest cannot be rebuilt. If we pull this off, I'm convinced Europe will have earned its place in history as a truly visionary and adaptive peace project. For now, the jury is still out. 

Three layers, twelve concrete moves, mapped to the people who need to make each one happen. Click through it before you read on, or come back to it after.

Layer 1: The generator

If the coalition is the body, this layer is its metabolic engine. And it starts at home, because a Europe that cannot hold its own substrate brings nothing to the coalition but need.

The middle power coalition and its mineral/energy scaffolding. Europe is not going to out-scale China on rare earths, processing, or magnets. What it can do is build a "mineral middle power group" with partners who share both the geology and the squeeze: Canada, Australia, Chile, Norway, the UK, India, Morocco, Kazakhstan, and – carefully – Indonesia. The logic of the coalition is not bilateral diplomacy multiplied by ten. It is the construction of an alternative offtake architecture, with price stability, joint stockpiling, distributed processing capacity, and pooled research and development that no single member state can deliver alone.

The coalition's instruments would include long-term offtake contracts at floor prices that protect partners from Chinese price warfare. Distributed processing infrastructure across allied jurisdictions, so that no single chokepoint can be captured or coerced. Shared strategic stockpiles for the metals most exposed to weaponisation. Pooled R&D budgets on substitution chemistries, recycling innovation, and lower-impact extraction. Embedded education and research partnerships, because long-term diplomatic alignment is built on human capital, not just commercial contract. Pieces of this architecture are already being assembled, but mostly by others. 

The same coalition logic extends from minerals to energy, because the scaffolding of a low-carbon economy is not only what you dig but what you run it on. Several of these partners are the world's firm-energy core as well as its mineral one: Canada, Australia, and Kazakhstan together hold the bulk of global uranium and fuel-cycle capacity, which makes the bloc a natural counterweight to the concentration of enrichment and conversion that Europe is otherwise exposed to. Beyond fuel, the coalition can pool what no member builds at scale alone - small modular reactor engineering and supply chains, deep-geothermal capability where the geology allows, grid-balancing and storage capacity, and the shared standards that let firm low-carbon generation move across allied jurisdictions. The same instruments apply: long-term offtake, distributed and de-risked supply, pooled R&D. 

Inside Europe itself, the coalition logic extends into the circular economy. A strict prohibition on the export of strategic scrap. Coordinated deployment of repair, reuse, and recycling infrastructure across all twenty-seven jurisdictions, with binding minimum standards. Recycling will not solve the primary-supply problem on a 2040 timeline - the volumes are too small and the demand curve too steep. But it changes the slope of the curve and builds the industrial base for the next decade's circular economy. It also fits the regenerative accelerationist direction: each piece of equipment that stays inside European loops is a piece of equipment that does not require new extraction elsewhere.

Who acts: The Commission and member-state foreign ministries jointly, with a single negotiating mandate rather than 27 bilateral conversations. The model is the energy purchasing platform that worked after 2022 - applied to lithium, cobalt, nickel, rare earths, graphite, etc and the processing capacity for each. 

How: With a binding multi-year framework, ratified at Council level, with EIB and national strategic funds as the financial counterparties to private offtakers. Not a working group. Not a strategy. A signed instrument with money behind it, structured to outlast individual electoral cycles in any single member state.

Investors: the coalition is upstream demand visibility you can underwrite against. The mispriced opportunities sit across the value chain - AI-enabled geological surveying, phytomining, microbial and low-impact extraction chemistries, processing and refining innovation, and the repair-reuse-recycling layer that urban-mining rules will make mandatory. The thesis is not "bet on a mine." It is "back the innovators who shorten, clean, and de-risk the chain that a state-backed offtake architecture is about to guarantee." Connect them into ecosystems and the demand, methods, and confidence aggregate over time.

Selective strategic autonomy (not autarky). Europe needs to tier its dependencies and organise its industrial policy swiftly and coherently.

First, the sectors where Europe needs to retain production for employment, social, and regional reasons, but where the technology itself is not strategically critical. That's where trade defence - anti-dumping duties, content requirements, foreign direct investment screening - is the appropriate instrument here, not full reshoring. The automotive sector is the live case. The point is not to recapture global market share but to avoid a second China shock, and to preserve the industrial base that anchors several major European regions, while the deeper transformation works through. The actors that benefit from protection must receive clear instructions that they must now invest into rapid transition trajectories. Can anyone tell Volkswagen that BYD is making cars that float when floods hit? Their survival depends on full reconfiguration. The European pride in thermal engines is one of the most stubborn pavements in Europe's valley of death. The cost is real. The cost of not paying it is worse.

Then there are sectors where Europe should be leading globally because it has both the capability and the directional alignment with regenerative accelerationism. Regenerative agriculture and bioeconomy. Phytomining and bio-based materials. Civil nuclear and small modular reactors. Advanced manufacturing in green steel, low-carbon cement, and other hard-to-abate processes. Mission-driven AI. Earth-system modelling. The point of this tier is offensive, not defensive: these are the sectors where Europe can set the global pace, define the standards, and convert technological leadership into geopolitical agency.

‍Who acts: the Commission, with serious input from the ECB and national security establishments, not just DG GROW (which incidentally DG Trade is at odds with). How: a public, regularly updated tiering of strategic dependencies, with each tier carrying different policy treatment – sovereign content requirements at the top, market discipline at the bottom. Honesty about the tiers is the political price of seriousness about the top of the stack.

‍The substrate beneath the substrate: regeneration (at every scale from local to bio-regional). Every recommendation so far concerns the materials of the transition - the minerals, the processing, the industrial base. But there is a substrate beneath that substrate, and Europe is losing it.The energy transition as currently conceived is extraction- and industry-heavy in a way that is quietly self-defeating because it is not ecology-informed. Mining the minerals, building the corridors, scaling the processing capacity – none of it stabilizes the climate if we compromise key ecosystem services ranging from the local to the planetary, and if the land base on which mining and processing sit continues to dehydrate, desertify, and lose its capacity to hold the systems that make extraction survivable in the first place. This is not a distant or future problem. Europe is among the most exposed regions on Earth to climate change. The Iberian Peninsula is one of the continent's most exposed climate hotspots. Southern Europe is hemorrhaging soil moisture, atmospheric moisture, and aquifer depth at rates that no industrial transition can outrun. A transition that secures the supply of cobalt while losing the supply of rain has not, in any serious sense, secured anything.

The reframe required is to treat regeneration not as the environmental afterthought of industrial policy but as one of its load-bearing pillars. If we have at least 15 years of extraction and processing ahead of us for primary inputs for the transition, while we cross the 2°C threshold and irremediably fragment ecosystems on the same timeline, we've already lost the transition altogether. Complex regeneration – the rebuilding of ecological complexity at landscape scale through vegetation corridors, restored wetlands, soil organic matter, agroforestry mosaics, and micro-topographic diversity – produces dividends across multiple registers in a single intervention. It captures atmospheric moisture through orographic and biotic-pump mechanisms. It rehydrates soils and slows runoff, reducing drought and flood exposure simultaneously. It stabilizes regional rainfall through vegetation-atmosphere feedbacks. It sequesters carbon as a co-benefit rather than as the design objective. And it does all of this at a fraction of the cost of the engineered adaptation infrastructure Europe will otherwise be forced to build – sea walls, desalination plants, drought-relief subsidies, disaster reconstruction – to compensate for the hydrological collapse it is currently choosing not to prevent.

Agriculture is where this stops being landscape theory and becomes the largest lever Europe actually holds. Farmland is the continent's biggest single interface with its own substrate - the dominant user of its land, the largest draw on its freshwater, the principal determinant of whether its soils hold moisture or shed it. An agro-ecological transformation of European farming - diversified systems, restored soil organic matter, water retention built into the land rather than engineered around it, and a steep reduction in the synthetic-input dependence that ties food production to fossil and imported feedstocks - is therefore not a niche of the regeneration agenda. It is its centre of gravity. And it runs directly into the instrument that currently funds the opposite: the Common Agricultural Policy (CAP), the EU's single largest budget line, still structured to reward the intensive, input-heavy model that is draining the substrate. Redirecting CAP is vital, because nothing of this scale gets built in Europe against CAP, and almost anything becomes possible with it.

Regeneration is not adjacent to the security argument that opened this essay - it is that argument, carried to its foundation. A continent that cannot hold its own water, soil, and rainfall is not sovereign in any sense that survives the century, however many magnets it stockpiles. Regeneration is the precondition for everything above it having a stable substrate to land on - and the point at which Europe's industrial strategy, its security, and its habitability turn out to be a single question.

The strategic logic for investors and industrial planners alike is that regeneration is a transition enabler with mitigation and adaptation dividends, not a parallel agenda competing for the same political oxygen. Mineral extraction embedded in regenerative landscape management and bio-regional interventions produces a different cost structure, a different social license, a different long-term resource base. Industrial corridors planned with hydrological restoration as a design constraint avoid the stranded-asset problem of building infrastructure into territories that will become unviable within the asset's depreciation horizon. The investment thesis is not "regeneration as ESG window-dressing." It is regeneration as the operating system that keeps the rest of the stack functional.

‍Who acts: the Commission, in particular DG ENV, DG AGRI, and DG CLIMA jointly with DG GROW – because the whole point is that regeneration cannot sit in the environmental silo while industrial policy is decided next door. Member states with the most exposed geographies – Spain, Portugal, Italy, Greece, southern France – need to lead on bio-regional implementation, with the Commission providing the legal scaffolding and the financial backstop. The EIB and ECB should treat ecological resilience as a category of systemic risk in their respective mandates, because that is what it is.

‍How: a binding bio-regional regeneration framework integrated into the necessary CAP reform, the Water Framework Directive revision, the Soil Monitoring Law, and the Nature Restoration Regulation – not as four parallel files but as a single coherent instrument with shared targets, shared monitoring, and shared finance. Carbon market revenue and a dedicated regeneration tranche of the transition financing capacity (Layer 2) provide the funding architecture. Carbon market revenue, a redirected CAP, a dedicated agro-ecological tranche of the next Multi-annual Financial Framework (MFF), and a regeneration tranche of the transition financing capacity (Layer 2) provide the funding architecture - CAP as the working mechanism, the MFF tranche as the top-up, not the other way round.

And – critically – diplomatic instruments to match. Hydrological cycles are not contained by national borders, and atmospheric moisture is the most stateless commodity there is. The Iberian Peninsula's rainfall depends on land-surface conditions in North Africa. Southern European drought is coupled to Sahelian degradation through atmospheric river dynamics that no member state can manage alone. A serious European regeneration policy is therefore also a foreign policy. The EU's Global Gateway should incorporate bio-regional restoration as a formal investment category alongside digital and energy infrastructure. The EU-Africa, Euro-Mediterranean, and emerging EU-Gulf partnership frameworks should each include a dedicated regenerative landscapes facility – Sahel and sub-Saharan Africa under the first, Iberian-North African-Levantine hydrological restoration under the second, Arabian Peninsula regeneration under the third. The same logic extends to how Europe trades for what it cannot grow. Agro-ecological partnership means sourcing food and bio-based inputs from partners on terms that build their soil, water, and ecological resilience rather than strip-mining it. We need regenerative trade partnership, which treats a partner's ecological base as part of one's own security perimeter. The partnership frameworks above should carry agro-ecological trade arrangements as a named category, not leave them to the residual logic of commodity markets. These are not aid programs. They are the diplomatic infrastructure of a continent that has finally understood its rainfall is co-produced with its neighbors.

‍Investors: scout, invest, scale innovators that solve for multiple planetary overshoots at once. Want mineral volume while depolluting soils? Phytomining. Want the extractive sector to earn its social licence? Regenerative-design extractives. Want midstream processing with a lower pollution load? Solvent innovation and organic plastics substitution. Want the European economy as a whole to thrive rather than contract? facilitate innovation platforms across value chains and regen-industrial ecosystems that devise territorial strategies to remedy European scarcity and resource shifts predicaments. The investment thesis is not regeneration as ESG decoration. It is regeneration as the operating system that keeps every other position in the portfolio from stranding.

Layer 2: The playlist

‍An industrial electricity price mechanism. Without this, no other recommendation in the stack survives contact with reality. Heavy industry will not electrify on power prices three to four times what they are in the US or China. Capital will not finance electrification of processes whose cost base is structurally uncompetitive. The pricing mechanism is the make-or-break of the entire transition: if Europe cannot deliver industrial electricity at a competitive price, none of the rest matters.

The instruments are known and have been litigated for years. Long-term contracts-for-difference at scale, awarded through competitive auction. A regulated industrial tariff for strategic users, paired with binding electrification milestones. Direct power purchase agreements underwritten by state guarantee. Decoupling industrial tariffs from gas-set marginal pricing during peak hours. Removal of fiscal levies on electricity used for industrial decarbonisation. The toolkit exists. What has been missing is the political willingness to deploy it at the scale required, because each instrument runs into a single-market objection from someone.

The objections are real. They are also answerable, and the answer is that the single market as currently constituted cannot survive the loss of its industrial base. A single market for a deindustrialising continent is a single market for warehouses. The doctrine has to bend. It has bent before — for the banking union, for the COVID recovery, for the Ukraine response, for the temporary state aid frameworks that loosened the rules when Germany and France needed them to. It can bend for the industrial substrate without which everything else collapses. The honest debate is not whether the doctrine bends, but who pays the cost of the bending and over what timeline.

‍Who acts: the Commission proposes, member-state governments decide, and DG COMP either adapts state aid rules or admits it is the binding constraint on the transition. That admission, if it comes, would itself be a moment of strategic clarity.

‍How: a strategic industrial tariff framework with clear sunset and review clauses, paired with mandatory electrification milestones for any beneficiary. Not a subsidy. A contract. The state provides price stability; the industry provides electrification at pace. Mutual obligations. Reviewable performance. Beneficiaries who fail to meet milestones lose access.

‍For investors: this is the single de-risking event for the entire electrification capex stack. Every electrified-process bet — green steel, low-carbon cement, electrochemistry, industrial heat — is currently uninvestable at European power prices. A strategic tariff framework converts those from stranded theses into bankable ones overnight. The signal to watch in 2026–27 is whether the tariff framework moves; if it does, an entire asset class becomes investable that wasn't the year before.

‍A genuine Capital Markets Union. Europe's pension and insurance assets are enormous and fragmented across jurisdictions whose insolvency, securitization, and tax regimes don't speak to each other. The result: European savings finance American and Chinese growth, and European companies cross the Atlantic to scale. This is the single largest unlock for private capital in the transition, and the fact that it has been "almost finished" for fifteen years is itself a diagnosis. A real CMU – harmonized insolvency, deep securitization, a pan-European pension product, a single supervisor for systemically relevant capital markets – would change the gravitational field of European venture and growth capital overnight.

‍Who acts: the Commission, the ECB, and a small number of finance ministries – France, Germany, the Netherlands, Italy, Spain – who can either lead this or block it. How: treat it as a single legislative package rather than a decade of incremental files. The piecemeal approach has demonstrably failed. A consolidated package, negotiated as one, with explicit trade-offs across member states, has at least a chance.

‍A permanent transition financing capacity at EU level. Twenty-seven national balance sheets, several of which are already at debt-to-GDP ratios that constrain action, cannot underwrite a continental industrial transition. The fiscal architecture either gets built, or the transition gets imported. So, call it a Eurobond, call it an expanded EIB, call it NextGen EU made permanent and ETS-backed, call it a Defence and Industrial Bond. The legal architecture matters less than the underlying move. The EU acquires a permanent fiscal capacity, ring-fenced for transition-specific debt, with its own dedicated revenue streams — ETS receipts, a digital services contribution, a carbon border adjustment mechanism, possibly a financial transaction tax. Not general budget. A purpose-built balance sheet servicing transition-specific liabilities.

‍Who acts: member-state heads of government, because this is a treaty-or-treaty-equivalent moment, not a Commission file. The Franco-German engine, where it still functions, is decisive here — but so is the willingness of the historically frugal northern member states to consider that the calculation has changed.

‍How: a dedicated, ring-fenced instrument with its own revenue stream – ETS receipts, a digital services contribution, a carbon border adjustment – servicing transition-specific debt under an explicit mandate, with sunset clauses and democratic accountability mechanisms that make it acceptable to fiscally orthodox member states.

‍Procurement as industrial policy's first rung. Europe is the world's largest single market and has used public procurement as an industrial weapon roughly…never. Public infrastructure, defense procurement, transport fleets, hospital systems, grid build-outs – all of it can carry European or allied-content requirements. Europe's tools have been almost entirely supply-side, which is why subsidies leak and capital doesn't follow. Demand-side mandates change the calculation. They create the order book against which industrial capacity can be financed. The Buy European Act and the Industrial Accelerator Act may finally start changing the rules of the game in that respect. 

‍Who acts: every level of government with a procurement budget – Commission, member states, regions, cities. The diffuse nature of European procurement spending is currently a weakness; coordinated, it would be one of Europe's most underused industrial weapons. How: a coordinated content framework with phased thresholds, with domestic-content rules extended to allied jurisdictions in the minerals coalition above. The architecture is not protectionist for its own sake; it is alliance-extending. European or allied content qualifies; content from rivals beyond the alliance does not. Phased thresholds give industry time to ramp up. Sectoral carve-outs allow flexibility in cases where domestic capacity does not yet exist at scale.

‍Defense-industrial-energy convergence + security and intelligence rethink. This is the recommendation policy writers miss and serious capital half-sees. The easy version is the procurement one, and it is true as far as it goes: drones need batteries, defence needs rare earths and magnets, autonomy stacks need sovereign compute and secure power, and treating energy, defence, and industrial capacity as one strategic portfolio rather than three rivals for the same political oxygen changes both the political and the investment math. But the procurement framing is too small for the threat the first half of this essay described. Russia - to name only one security threat - is not attacking Europe just with tanks; it is attacking through sabotage, cyber, systems-disruption, and the coercion of supply chains. In the near future, it will systematically weaponise agri-food supply chains and ecological architectures as it reaps the benefits of climate change itself. The security that has to be built is therefore multi-dimensional - kinetic deterrence, yes, but equally cyber and infrastructure defence, hybrid and information resilience, and intelligence-sharing built outside the structures that route through Washington, because those structures are now the variable. And - for the first time on a list like this - ecology belongs on it too. Climate change is producing winners and losers; great parts of Europe sit in the losers' camp while Russia plans to capitalise on a winning starting position. Rebuilding ecological resilience - food, water, forestry, ecosystemic integrity - is not adjacent to security. It is security. 

At the centre of that surface sits the one dependency that is not a procurement problem at all. A continent that runs its grids, its data, and its critical systems on hardware governed by someone else's software (possibly China’s?) has not just bought a vulnerability - it has surrendered a piece of its sovereignty, and no volume of purchasing reverses that. The energy-compute chokepoint is where energy and intelligence fuse, which makes it the genuine coal-and-steel of this era: the substrate you can build neither a deterrent nor a modern economy without. It has to be brought under shared and sovereign control among the coalition the intro described - common standards, common supplier qualification, pooled authority over the grid-control and compute layer - so that neither a single member nor an outside power holds the switch. This is the convergence that matters: not defence plus energy as an investment portfolio, but security, intelligence, energy, compute and ecology as a single sovereignty problem that the coalition either solves together or fails at separately.

‍Who acts: the Commission, the European Defence Agency, defence and interior ministries, national intelligence services, and the EIB — which until recently could not lend into defence at all and now can, a change whose significance is still underpriced. How: a converged strategic framework that treats the defence-industrial base, the clean-industrial base, and the compute-grid chokepoint as a single planning problem, with common standards, common supplier qualification, shared stockpiling of the inputs all of it depends on, and intelligence integration that does not depend on a third party's goodwill.

For investors: this is the structural mispricing the European venture and growth ecosystem has not yet absorbed. Dual-use capacity carries two demand curves - a civilian electrification curve and a defence-procurement curve - and the EIB's entry into defence lending means the public sector is now co-investor and offtaker across both. Drones, batteries, power electronics, secure compute, sensing, autonomy software, magnet manufacturing: the companies sitting at the civilian-military intersection are the ones where state demand de-risks the thesis from both sides at once.

Layer 3: VIPs: Private capital and venture capital

If the upstream and midstream layers are built, the downstream layer is where the returns live. If they aren't built, the guests lose their capital. So this section is conditional, and investors reading it should treat the upstream advocacy as part of their own investment hygiene.

Underwrite the unsexy middle of the stack. European venture has been over-indexed on consumer software and is now over-indexing on AI applications. The mispriced opportunity is the deeply unfashionable middle: mineral processing, power electronics, grid hardware, industrial heat, electrochemistry, ferroalloys, magnet manufacturing, electrolyzer components. These look like hard tech with capex problems. They are actually sovereign-backed near-term offtake with strategic moats – if the upstream layers move. A fund that underwrites this thesis seriously in 2026 is positioning for a decade in which the public sector becomes its largest co-investor and customer. Look at the American VC world now: a prime mover into infrastructure that will determine how the 4th industrial revolution plays out. Let's play the game in Europe.

Build for the European exit reality, not the American one. The default European VC underwriting model assumes a US strategic acquirer or a US listing as the exit. That assumption is fragile under a US administration pursuing fossil dominance and increasingly ambivalent toward European tech. The implication for fund construction: companies built to exit into European or allied middle-power strategics, with cap tables, governance, and IP regimes designed for that reality from inception. Different scaling logic. Different syndicate composition. Different geography of follow-on capital.

Take state co-investment seriously. European investors now need to develop the muscle to co-invest with the EIB, national strategic funds, sovereign wealth (Norway, Singapore, in some circumstances, Saudi Arabia too), and industrial primes – without treating it as contamination. The winning companies in the transition will have hybrid cap tables. The funds that learn to operate in that environment without diluting their decision-making will have asymmetric access to the deal flow.

Build the missing later-stage capital. Europe seeds well, Series-A's well, and then hands its winners to American growth funds – which is how the continent ends up financing other people's industrial base with its own intellectual property. The structural reform European VC owes itself is the €500M to €2B growth fund that can hold European winners through to maturity. This is partly an LP problem the CMU is meant to solve, and partly a self-imposed limitation about what European fund managers think is possible.

"Europe has been a guest at other people's parties for thirty years. The Electro Union is the first party Europe has a chance to host on its own terms."

So now that you've read a long piece – with, I hope, a strongly caffeinated drink in hand — what do you actually do when you turn up to work on Monday?

If you are reading this as a VC, the next decade is your decade or it is somebody else's. The cap tables you build in 2026 and 2027 – what you fund, what you decline, what you push your LPs to allow you to fund – will determine whether Europe has an industrial base in 2040 or whether it has become a museum with questionable public transport. The recommendations in Layer 3 are not aspirations. They are job descriptions. Underwrite, build, co-invest without flinching. And advocate, loudly, for the upstream layers that determine whether your portfolio compounds or strands. The advocacy is part of the investment thesis. People like me are here to work with you.

If you are reading this from a policy desk, the architecture above is built on the assumption that you understand the windows are narrow and stacked. The next CAP reform, the next Multiannual Financial Framework, the CMU package, the procurement framework, the regeneration instrument – these are not separate files. They are one decision, distributed across institutions that are not yet structured to make it as one decision. The work is to build the connective tissue between them in the time you have, which is less than you think.

If you are reading this from inside an industrial group, a research institution, a regional government, a foundation, a union – the answer is the same answer in a different vocabulary. The Electro Union does not get built by waiting for somebody else to start. It gets built by the people who decide, in the next eighteen months, to behave as if it is being built, and who then drag the institutional architecture into compliance with that behavior. People who stop mistaking the trees for the forest. The next decade determines whether Europe comes out alive of the valley of death. We will rise as Europeans for the first time, or we will be reduced to pawns on a geo-strategic chessboard faster than we'll have time to realize.

The invitation

Europe has been a guest at other people's parties for thirty years – at Pax Americana's, at globalization's, at China's industrial coming-out. The Electro Union is the first party Europe has a chance to host on its own terms. Not because Europe is strong. Because by 2040, Europe will have shed its old skins. It will have transformed into a peace project that prevents the return of the past by meeting the stakes of the future, and adapts as the planet shifts beneath its electro-shell toes. A peace and security project we build in partnership with other middle powers, to secure dignified living on a planet we will have learned to interact with differently.

See you on the dance floor in 2040. If we get there together, we won't need designated drivers. We'll be raising a few too many glasses to the dawn of a different era.

‍Olivia Lazard is Founder of Transition Intelligence, Fellow at the Berggruen Institute, and Director of Peace in Design Consulting.
This essay is a companion to Norrsken's open letter, Make Europe the Electro Union, calling on the EU to commit to 50% clean electricity by 2040.