The world order is shifting with unprecedented force – and not just since this year’s World Economic Forum in Davos. For the European Union, which has developed a number of military, digital and economic dependencies, there is a great deal at stake. These dependencies extend to the financial universe as well, showing clearly that unilateral dependencies not only leave governments and large European enterprises vulnerable, but also affect retailers and households.

US stock exchanges dominate the global markets. European enterprises are increasingly choosing to go public in the United States because it is home to the largest financial market. ETFs, which are very popular amongst European savers, often track global stock market indices in which US equities make up about 70 %. In Europe, digital payments are often made using credit cards or online payment services provided by US companies. And domestic retailers, large enterprises or banks are finding it all but impossible to avoid using financial services provided by US corporations.

This dominance increased after the financial crisis of 2008. After the crisis, US enterprises, including financial service providers, focused on innovation and digitalisation, investing heavily in these areas. Europe invested far less and far later in the digital world. This explains not only the success of US financial service providers in the European Union, but also the dependencies this has created. These dependencies could well grow because the volumes the United States and China are investing in digital innovation and artificial intelligence exceed the amount Europe is investing many times over.

As the world order changes, however, one key task must be to reduce Europe’s dependencies and strengthen the European Union’s sovereignty. One possible measure would be to diversify. The trade deal with India and the Mercosur agreement, which will hopefully be implemented soon, show how much potential other partnerships can have. This is also true for Africa, which is soon set to be the world’s most populous continent. China has recognised this and is already pursuing strategic partnerships with the region.

Besides tapping new markets, the main objective must be to dramatically boost Europe’s innovative power and thus also its productivity. This is the only way we will be able to withstand global competition and safeguard prosperity. Tomorrow’s financial world will also primarily be about innovation. The financial universe of the 2030s will be completely different to the one we know today. Assets such as property, securities or artwork will be converted into digital tokens, allowing fractions to be bought and sold. People everywhere will be able to send money home to the other side of the world in mere seconds and, what is more, cheaply. Younger investors wanting to buy or sell shares at low cost within the space of a few minutes will see their wish come true.

The list of potential wishes is long because, ultimately, they are all aimed at making people’s daily lives simpler, more convenient and more cost-effective. The financial universe of the 2030s will be centred around people and their everyday lives. That is why it is so important for the European Union to keep an eye on these developments and prevent further key dependencies from forming by being innovative and productive on its own behalf.

The new leading markets will emerge wherever innovation is promoted, developed and implemented. Innovation is Germany’s strong suit. Germany is Europe’s number one location for patent applications and ranks fifth worldwide. Unfortunately, it is often the case that ideas developed in Germany are made into money elsewhere. Even ideas that have been successfully implemented in Germany frequently pave the way for developments in the United States or Asia. This usually happens when a high degree of innovation is needed for the business to thrive. Europe needs to be more willing to provide risk capital if it also wishes to reap the major rewards of German innovation. Germany must overcome its fears in this regard.

Europe, like Germany, is facing challenges. But they are not insurmountable. International investors’ keen interest in the European Union, and especially in Germany, shows that we have a lot to offer. The total amount of foreign direct investment is likely to have almost doubled in 2025. People outside Germany often see our country in a far more positive light than we do. This is because Germany has what it takes to become a leading hub for innovation – in all key sectors. 

The time has come for us to present Germany in a way that does it justice – a country built on solid foundations, whose challenges can be tackled. For the European Union and Germany, the shift in the world order means a chance to build a strong and sovereign continent.