This week European leaders scrambled to find a way through the diplomatic fallout of President Trump’s demands for ownership of Greenland, and threats to impose tariffs on any European country that tried to stop him. Thankfully, the immediate threat seems to have passed (for now) but the entire affair underscores the need for Europe to reduce its economic and diplomatic reliance on the United States. We have pulled together five actions that should be prioritised to achieve that, based on what the experts are saying.
First, Europe must scale up its investment in defence. The US has at times taken a remarkably pro-Russian position on the war in Ukraine, and an EU country could be Putin’s next target.
Second, Europe should work to knock down internal trade barriers within the Union. According to ECB analysis, these equate to a tariff of approx. 100% on services and 65% on goods – far more than the tariffs imposed by the US on the bloc.
Third, Europe should diversify its external trade and economic relations. This means tightening links with the likes of the UK, Canada, Japan, South Korea and anyone else that values a rules-based international order. The European Parliament’s decision to defer the ratification of the EU-Mercosur trade agreement is regrettable in this regard.
Fourth, Europe should accelerate its energy transition. As a bloc, we have limited fossil energy reserves of our own, but plenty of wind and sun. Following the Russian invasion of Ukraine, we largely replaced our reliance on Russian gas with a reliance on American LNG. Even if it wasn’t for the climate argument, renewables would be the best way forward.
Fifth, we need to build up our own stock of large and highly productive companies. Advancing the ‘Savings and Investment Union’ to deepen Europe’s capital markets is an important step here.
None of these steps is easy to implement. However, the events of this week show that we have little choice.
Political Update
Government Seeks X Before Oireachtas Committee Over Grok AI ‘Nudification’ Scandal
Taoiseach Micheál Martin and Tánaiste Simon Harris met with several ministers this week to discuss the laws relating to the generation and sharing of explicit images on social media, following reports that X’s AI chatbot Grok has been used to create nude images of women and minors. The Taoiseach said he would request X’s presence at a committee hearing in the wake of reports that caused public outrage.
The focus of the scandal has been on Grok’s so-called “nudification” capability, which has been used to generate explicit images by digitally removing or reducing clothing in photographs. The issue has also prompted decisions by public bodies on their engagement with the platform, with Dublin City Council deciding to leave X following a motion brought by the Green Party, while the Sustainable Energy Authority of Ireland (SEAI) announced it would stop posting updates on the site.
Minister with responsibility for Artificial Intelligence, Niamh Smyth, said “concerns remain” regarding the Grok AI tool following a meeting with X executives. She said she welcomed “corrective actions” taken by X after executives told her Grok had been “disabled from removing or reducing clothing on individuals worldwide”.
X has also confirmed it will “geoblock” the ability of Grok and X users to create images of people in “bikinis, underwear, and similar attire” in jurisdictions where such actions are deemed illegal.
Economic Update
EU–Mercosur Trade Deal Faces Prolonged Delay After Parliament Sends Agreement to EU Courts
The EU–Mercosur free trade agreement has been thrown into uncertainty after the European Parliament voted by a narrow margin to refer the deal to the European Court of Justice to assess its compatibility with EU treaties this week. The move halts the ratification process, potentially for up to two years, with a parliamentary vote that had been expected this spring now put on hold pending a court ruling.
The referral intensifies political pressure on the European Commission and EU leaders to consider provisional application of the deal before parliamentary approval, a legally possible but highly contentious option. While a sizeable majority of EU member states have already backed the agreement, countries including Ireland, France and Poland remain opposed, citing concerns around agriculture, environmental standards and democratic oversight.
In Ireland, the vote exposed deep divisions among MEPs. Fine Gael and Fianna Fáil MEPs were split, with supporters of the deal warning that delays risk undermining Europe’s trade diversification strategy amid strained EU–US relations. Opponents argued the Commission has ignored concerns about beef imports, lower production standards and deforestation in the Amazon, and welcomed the court referral as a democratic safeguard.
Sustainability Update
Wind Energy Ireland Sets Out ‘Electrostate’ Vision as Government Signals Climate Plan Delay
Plans for Ireland to become one of Europe’s first “electrostates” were set out this week at the Wind Energy Ireland (WEI) annual conference, signalling a major push towards energy independence by 2030. Noel Cunniffe, WEI Chief Executive, defined an ‘electrostate’ as a country powered by secure, affordable, home- grown clean energy with cleaner air, warmer homes, and effective grid infrastructure.
A new roadmap launched at the conference sets out how this ambition could be delivered, with large-scale expansion of wind energy at its core. WEI argues that wind farms must be built more quickly and at lower cost to deliver tangible benefits for consumers, while warning that progress will depend on maintaining public support.
The strategy also focuses on strengthening Ireland’s energy independence by accelerating electrification across the economy. WEI plans to work with education, research and industry partners to roll out upskilling programmes, aimed at ensuring the workforce can meet the demands of a rapidly expanding renewables sector
Attendees at the conference also heard from Minister for Climate, Darragh O’Brien, who earlier this week indicated that the Government’s Climate Plan for 2026 will not be published before April. Minister O’Brien stated that a coherent plan cannot be produced until next set of five-year carbon budgets has been finalised.