German Chancellor Friedrich Merz declares that global geopolitics and the economy have shifted to great-power politics at Davos 2026, urging Europe to boost defence and competitiveness amid Russia and China’s challenges.
Speaking at the World Economic Forum in Davos, German Chancellor Friedrich Merz warned that global politics and the world economy are entering a new phase of great-power rivalry, forcing Europe to rethink its security and competitiveness.
In his January 22 address, Merz argued that the post-Cold War order is rapidly unravelling, driven by China’s long-term rise and Russia’s invasion of Ukraine. China’s rise, he said, reflects decades of sustained planning and investment in technology, reshaping global competition.
Merz said Europe’s response must be decisive, calling for closer unity among member states, increased defence spending, and a reduction in strategic dependencies that leave the bloc vulnerable.
Post-Cold War Order Disintegrates Rapidly
German Chancellor Friedrich Merz painted a stark picture of the world’s direction, warning that global politics is increasingly being shaped by power and force rather than cooperation.
He said Russia’s invasion of Ukraine marked the clear beginning of a new era, one that is already forcing major shifts in global strategy. The United States, Merz noted, is responding with significant shifts in its foreign and security policies.
Europe, he argued, cannot remain fragmented. To avoid becoming vulnerable, it must work more closely together, spend more on defence, and rebuild its economic competitiveness. Referring to Germany’s own history, Merz warned that a world governed solely by power is dangerous, while stressing that values alone are insufficient to safeguard peace and stability.
China’s Foresight Reshapes Competition
German Chancellor Friedrich Merz said China’s rise to great-power status was no accident, but the result of decades of long-term strategic planning, a reality Europe must now confront.
Speaking on Europe’s future, Merz argued that the continent must be willing to exercise its own power while staying firmly tied to NATO and its partnership with the United States. Germany, he said, is placing renewed emphasis on economic strength and intends to lead Europe through structural reforms.
To meet the moment, Merz called for bold and politically difficult policy choices to strengthen security, boost innovation, and drive long-term growth. Pointing to continued support for Ukraine and recent hybrid attacks in the Baltic region, he warned that transatlantic security interests in Northern Europe are becoming increasingly critical.
Europe’s Urgent Reform Imperative
German Chancellor Friedrich Merz said Germany intends to play a leading role in shaping Europe’s future, stressing that the country carries a special responsibility for progress across the European Union.
He outlined four priorities: helping secure a just peace for Ukraine, strengthening Europe’s ability to defend itself, cutting risky dependencies, and unlocking the continent’s economic potential. Analysts say easing regulatory pressures and accelerating reforms will be critical for Europe’s ability to attract investment, support innovation, and remain competitive in an increasingly fragmented global economy.
Invoking the spirit of the Enlightenment, he said Europe cannot leave its fate to others. Its future, he argued, will depend on clear-eyed realism and partnerships built among equals.
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