The global economic landscape is entering a period of heightened volatility marked by structural uncertainties, with no clear solutions in sight, according to Jean-Herve Lorenzi, president of the French economic think tank Le Cercle des economistes. Speaking ahead of the 26th Les Rencontres Economiques d’Aix-en-Provence forum, which commenced on July 26, Lorenzi warned that the established anchors of global order have weakened, complicating the efforts of major powers to navigate ongoing economic conflicts.

Lorenzi emphasized that European nations must urgently forge a strategic pact with China to safeguard their industrial bases. He argued that the deindustrialization of Europe and other Western countries was the product of deliberate policy decisions made decades ago, when manufacturing was outsourced to China to reduce costs and boost consumer purchasing power. This shift ignored China’s long-standing historical role as a global hegemon and its rapid rise as an economic and scientific powerhouse.

Highlighting demographic challenges such as an ageing population, Lorenzi said Europe faces headwinds that could hinder innovation and growth. He noted that older populations tend to save rather than invest, reflecting a broader cyclical decline in Europe’s economic dynamism. The forum’s theme, “Navigating a world without bearings,” reflects a recognition that familiar geopolitical and economic reference points are disappearing, exemplified by events such as recent conflicts in the Middle East. Lorenzi pointed to Iran’s confrontation with a leading global military power as evidence of this new reality.

Central to Lorenzi’s concerns is the risk of an armed conflict between China and the United States, often described as the “Thucydides Trap,” a term referring to the tensions between a rising power and an established dominant one. He noted that while Chinese President Xi Jinping has expressed optimism that such a conflict can be avoided, the threat remains a key focus for the forum’s discussions.

To better position itself in this uncertain environment, Lorenzi called for deep structural reforms within the European Union. He advocated for a more streamlined decision-making process, concentrating authority among the bloc’s largest member states rather than maintaining equal representation for all. Specifically, he suggested leadership by a coalition of four or five major countries while seeking to enhance ties with the United Kingdom.

Although Lorenzi expressed cautious hope for Europe’s economic rebound, he underlined that the continent is unlikely to reclaim its previous global prominence. He stressed the need for a clear vision aligned with the realities of a rapidly evolving world order, warning that the European Union as it currently stands may lack significant influence going forward.