Davos 2026: scenes from a divorce

🔸During the first presidency of Donald Trump, Angela Merkel was often referred to as the true leader of the free world. Now in Davos, Canadian Prime Minister Mark Carney delivered a speech (20/1) which put him in the position of intellectual and moral leadership. Contentwise, the speeches of Macron, Merz and von der Leyen were also significant, but not so well crafted and presented as Carney’s. All these speeches, and many others delivered at the Swiss holiday resort, gave evidence of a rupture in the international system, primarily between the US and the EU. Most Europeans share the view that though this sorry developments were brought about by the second presidency of the erratic Donald Trump, a return to the status quo ante (for some: a golden age) will not be possible in the foreseeable future.

🔸Perhaps the most important revelation in Carney’s speech was that the rules based international order (RBIO) has been a fiction. It has been partly genuine but systematically violated by the most powerful. The strategy of the middle powers is to adopt "values-based realism" (attributed to the smart and narcissist Alexander Stubb). Behind the high-flying conceptual discussions Davos was dominated by the language of divorce. One side said: “we have been living in a lie, I don’t want to do that any more”. The other side said: “I have provided security for you and never asked anything in exchange.” Who owes what to the other is a crucial question in such situations, and will continue to complicate US-EU relations also in the future.

🔸Mark Carney did not only rumble but also outlined a new way to behave and cooperate for middle powers which would define the new era if all of them think and act in a similar way. Crucially, this strategy of diversification and risk management will only work in the current circumstances if China is included in the game, and in a big way. Actually, before he talked the talk in Davos, Carney walked the walk first, when he visited China (16/1) and the two sides decided on mutually beneficial tariff reduction measures. And it was in China where Carney first spoke about “a new world order”, while meeting President Xi Jinping. This is the deals-based side of the new Canadian approach, and Carney would need to work more to demonstrate the values.in Davos, he avoided the whole question of multilateralism (except for saying that it has been naïve), without which we might just be in a transition from global monarchy (unipolarity) to global oligarchy. It was the representative of the PRC (Vice-Premier He Lifeng) who mentioned the importance of multilateralism.

🔸The failure of globalisation has been a key part of the Trumpist narrative since the US shifted back to nationalism. In Davos this was most forcefully presented by Commerce Secretary Howard Lutnick. Partly this is just gaslighting the US public which indeed suffered the loss of decent jobs and various forms of social distress but not simply because of globalisation but the rising intra-US inequality which MAGA people prefer not to talk about. But Trump himself also spoke about globalisation (21/1), complaining that many other players made profits out of the generosity of the Americans. What he refers to is that the unlimited US purchasing power in the world, which has been the consequence of unlimited borrowing capacity of the US, generated profits to those who export to the US. And this model has both side effects and objective limits. If that’s what the Trumpists mean, they are not incorrect. And the failure of many Europeans, including leaders of EU institutions, to recognise the unsustainability of global imbalances is a major reason behind the EU failing to find a viable strategy in these times of global rupture. The Chinese view expressed in Davos is that globalisation may not have been perfect, but solutions to existing problems should be found through negotiations.

🔸The Davos audience, and especially the Europeans, were impressed by Carney’s reference to Vaclav Havel. The Czechoslovak dissident writer (and later President) wrote about a shopkeeper who pretended to consent with communist rule which was a key factor in upholding the system in general. There are two comments to be made here. One is that the adaptive behaviour of Havel’s shopkeeper was obviously not the full explanation in the 1970s and 80s. Czechoslovakia was the test ground of the Brezhnev Doctrine (1968), representing the determination of the USSR to keep its external empire. When Gorbachev withdrew the above doctrine, change became possible. But the fact that Czechoslovakia revolted among the last in 1989, allows one to think that there was also a certain degree of output legitimacy in play. For Carney to quote Havel’s story is about signalling the end of a tacit political contract, but it also misportrays the middle powers which might have been subordinated to the US in the RBIO but they were not victims but rather complicit in all different wrongdoings and crimes, often just delivering moral or legal cover to global inequalities, exploitation and atrocities.

🔸Trump’s Peace Board, which was also announced in Davos (22/1), appears to be a concrete step to align international relations on MAGA principles. This weird phenomenon grew out of Trump’s diplomacy around Gaza, but the barely veiled goal of all this today is to undermine and if possible kill the United Nations. Trump’s peace narrative is surely fuelled by his desire to receive (sooner rather than later) the Nobel Prize for Peace, but it should not be entirely dismissed. Sometimes the horrible end to a war is better than the endless horror. Sometimes just freezing a conflict can be the best option possible to save lives. Being built completely outside the framework of international law, the Peace Board is emerging more as a vanity project and a cartel of rogue actors, and those opposed to the principle of “might makes right” shall not only stay away but think about upholding and progressively reforming the UN system, which is the legacy of a truly great US President, Franklin D. Roosevelt.

🔸Trump presented himself as a man of peace in Davos when he said he would refrain from military force for the acquisition of Greenland. This announcement was met with a sigh of relief, also heard in Brussels, during the extraordinary meeting of the European Council (22/1). Suddenly, the TACO theory became popular (Trump Always Chickens Out), which feeds on examples like Iran, Ukraine and Venezuela. In cases like this Trump considered stronger strikes (or weapons supply like Tomahawk in case of Ukraine) but tended to stay with the “soft way” as opposed to the “hard way”. Behind this oscillation, and the fuzzy communication of the President, there must be lots of cost-benefit analysis at the top level of the administration, which believes that building up a credible threat is a necessity in all conflicts, while eventual decisions must factor in all different implications. What concerns the Greenland dispute, the potential capital market reactions to another round of the trade war, or an even worse conflict, might have helped to pull back. But we know that the US interest in Greenland is not new, the Trump-Rutte talks were not transparent (not even for the Danish government), and this story is not over. To be continued soon (at the Munich Security Conference).