Blain’s Morning Porridge VE Day 2025 – 80 years later Europe will finally unite

“What President ever talks like that?”

Trump was right: NATO had become an American Umbrella. Europe needs time to re-establish its own defence capacity – and that requires respect on both sides of the Atlantic to achieve security without further destabilising global peace. These are “interesting” times indeed.

Apologies for a moment of reflection this morning….

80 years ago the USA suffered over 500,000 casualties during the Liberation of Europe. Nearly 105,000 of them died, fighting in the air and on the beaches, though the cities, forests and fields of France, the Low Countries and Germany. They fought alongside the rest of the Allied Armies; The British, The Canadians, The Free French, The Polish and the others all of whom paid similar butcher’s bills. Many others from across Europe, the Empire and the Americas paid the ultimate price in the battles for North Africa, the Med, the Atlantic and up the gut of Italy. Lest we forget; The Red Army lost over 8.5 million military dead contesting the Road to Berlin from the East.

Was it worth it? The consensus has always been it was.

Today, VE Day, we demonstrate pride in the sacrifice of so many young men, and not a few women. We talk about it as the cost of freedom and democracy. The Russians stress the defeat of fascism – their experience of around 16 million civilian deaths left them with a very different perspective which still colours their fears.

Although the Iron Curtain and a Cold War swiftly divided Europe, the success of the NATO Alliance has been 80 years of watchful peace. In the West, the alliance became the bedrock of Europe’s recovery, curing former enemies of their hatreds and rancour, ushering in a period of unparallelled stability and prosperity. Europe is finally moving towards effective unity replacing millennia of tribal warfare.

Meanwhile, the West outgrew and surpassed the USSR through its productive successes – the Cold War was won by the balance sheet and deterrence, and a generation of young Americans and Europeans were spared hot conflict. It is fair to say American exceptionalism and dollars led the alliance – and Europe was more than happy to slash spending in a peace dividend when the walls came down.

Today we remember the past, but we have to face up to the fact the world has changed. There is no longer the same consensus.

America has changed. Many Americans regret the split with Europe, but their president and the party that won the election have chosen a different path. It is not a pretty path or one that makes much sense to many observers. Europe is shocked and dismayed by the naked threats to Canada and Greenland. China and Russia are paying close attention to the widening rift between the US and its allies. Renewed conflict has become a rising risk.

President Biden, interviewed by the BBC, said: “that’s not who we are”, when speaking of President Trump’s words and actions.

But Trump is the reality. At best his desire is to reduce America’s entanglements, and save money by cutting its military costs. He wants Europe to pay its own way in defence – which is fair enough. The assumption America would simply look after us forever was a bad one. The downside is we can’t go back. Even if future US presidents rush to rebuild bridges with Europe and seek to give reassurance – the Trans-Atlantic trust that was established over decades will now always be subject to the risk another Trump, or Vance lies in the future.

That means Europe and the USA need to find a new way forward.

Europe has to change. It has to unite. A key part of the future will be how Europe agrees to fund NATO’s successor; a European alliance. And that’s potentially a great opportunity for Europe – which must include the UK. (Despite the trade deal Trump is desperate to publicly sign today as proof “foreign leaders want to kiss” his lardy ass.) Yet, this morning the FT writes about European nations being asked prioritise security, and dial-down hostile rhetoric about tariffs to reduce the possibility Trump will sabotage the Nato summit in June.

That reeks of appeasement. America has chosen its path. Europe must choose its next moves carefully – including how much to push back. In 1936 the Nazis began the process of testing the Versailles Treaty that ended WW1. Their first move was to move German troops back into the Rhineland in direct contravention of the treaty terms. France and the UK did nothing – setting in motion the path to War in 1939.

However, the split between the US and Europe does not need to be hostile. It can remain one of Economic partnership – aligned with democratic goals. The point is Europe needs to show its mettle, not by pandering to Trump, but demonstrating our intent to rearm and defend our interests to hilt – and garnering the support of Trump and America to do so. The NATO Summitt is as good a venue as any to set out Europe’s future defence.

There is a risk Europe standing up to Trump will only embolden Putin and Xi to view the West as broken. A new European alliance must involve America in some form to show the autocrats we remain aligned – a partnership re-established in a way that reflects the way the world has changed, enabling America to be America, and Europe to become a United Europe.

Tomorrow.. back to markets…

Bill Blain

Author Morning Porridge

Founder Windshift Capital

Partner Shard Capital