The times they are a-changin’. Only a year ago Brussels was calling for total war, for weapons to pour into Ukraine, for an unflinching stand against Moscow. That martial language has since given way to a softer refrain that insists Europe was always about peace. The shift is telling. Roberta Metsola, who only months ago spoke of arms and military aggression, now sounds as if she is rewinding the cassette tape and re-doing her script.

At the centre of this transformation was Alaska. The meeting there between Donald Trump and Vladimir Putin was politics as spectacle, carefully staged for a global audience. From Sergei Lavrov’s CCCP jumper to the B52 bomber circling above, it was theatre designed for the cameras. And it worked. Putin gained what he has long sought: a symbolic return to the international fold. That smirk must have ruffled some feathers.

Trump, for his part, once again proved his mastery of optics and his appetite for breaking precedent in pursuit of a deal, even if the risks are high. Whether this gambit produces lasting progress remains to be seen, but for now the advantage lies with Moscow.

Europe’s position on Ukraine has shifted in parallel. Once it spoke of restoring Kyiv’s sovereign borders in full. Today it says territorial questions are for Ukraine to decide. It is a retreat, and it reveals the gradual erosion of European authority and consistency.

It is the very outcome so many of us warned of, a clear sign of Europe’s diminishing standing in a world it finds hard to understand.

The real foundation of any settlement, however, will not be about rhetoric but security guarantees. Only firm commitments with the weight of Article 5 language can secure Ukraine’s future and that’s the direction this seems to be going. The American President seems to be siding towards this, and that is a good sign.

Europe has failed to provide this for years. Unlike the Baltic states, Ukraine was left stranded in the middle ground between West and East. German hesitation, partly because of oil from Russia but a sentiment echoed across the continent, opened the grey zone in which Putin felt confident to gamble.

Yet there remains a path forward for Ukraine. Full NATO membership is not essential if it can rely on enduring American backing. South Korea and Japan are examples of this arrangement working in practice. A credible path towards European Union membership would strengthen Ukraine’s position still further, embedding it in the Western system.

But peace will not be simple. Putin appears to demand far more than his forces currently control. He covets mineral-rich regions that Ukrainian soldiers have defended at immense cost.

To hand over such land would not only wound Ukraine’s economy but also its sovereignty, because military leaders will tell you that region, so difficult to navigate, is a layer of protection for Ukraine. Conceding areas which were not invaded by Russia would be a strategic concession of the highest order and that will be one of many difficult positions that need to be overcome for a deal and Putin is demanding this.

The question is whether this demand is a bargaining ploy to secure leverage, or a deliberate trap to force refusal and apportion blame. With Putin, the line is always blurred.

In the meantime, European leaders are pushing one another to get to Washington in what is almost a sad spectacle.

The photographs of European leaders gathered around the resolute desk in Washington like school children were PR disasters and a massive submission to the leader in the room: Donald Trump.

The White House even released a photo on social media in which Keir Starmer, pushed so far to the side, disappeared from the frame entirely. It was a mishandling of optics that protocol should have avoided, though one suspects Donald Trump enjoyed every moment of it. From his Apprentice days he has perfected the image of the seated authority figure. This time his audience was not reality show contestants, but the leaders of the old world arrayed before him.

We’re really back to 1945 in terms of power games and reminds me of Churchill’s bitterness at Yalta, when Europe was reduced to the margins as the superpowers carved up the post-war order. Then, as now, Europe risked being “caught between the hammer and the anvil”, as Churchill had described it.

Now let’s get to the crux of the problem.

Brussels believes that more military spending will restore European influence by reducing dependence on Washington. I cannot disagree more because this is an illusion.

Europe cannot compete with American military might pound for pound, and it should not attempt to. America’s strength has never resided only in bombers or submarines. It lies in the vast engine of its economy, in its power to innovate, in its unmatched ability to turn ideas into global industries. America is formidable because Silicon Valley, Seattle, Chicago, Houston and Wall Street are formidable. Europe today has no equivalent. Just look at the economic growth charts of the past five years – America is steamrolling and Europe is stuck with the cost of this seemingly endless war that caused so much economic pain.

Instead of chasing military parity, Europe should confront its economic malaise. Why are the most dynamic artificial intelligence firms in Asia and the United States? Why is microchip production overwhelmingly abroad? Why are billion-dollar unicorns clustered in America, and China while the continent drifts? The answer lies in Europe’s own structural failings: rigid labour markets, suffocating bureaucracy, and a deep reluctance to invest in tomorrow’s industries. Combine those structural flaws with a fixation on symbolic tokenistic policies, endless environmental box-ticking and layers upon layers of regulation, and Europe is left with a recipe for decline rather than renewal.

Europe should not measured by how modern its tanks are but by its balance sheets, its productivity, its place in the digital future. Too often, the continent resembles a museum, admired for its past rather than respected for its promise. This must change. France, Germany, Italy and the European Union need bold reforms that liberate entrepreneurship and reward innovation.

You know why we’re losing? Let me give you tangible examples.

France have a decent start-up scene but once they reach a baseline of success, they move to the United States. Start-ups such as Dataiku, Algolia, Kyriba and Aircall all left Europe for America.

The French adtech company, Adwanted Group, couldn’t get basic financing in Paris but once they spoke to American investors, they flourished. They’re based in New York now, employing over 200 people with high-paying jobs.

Stories like this are all over Europe. Spotify, a Swedish company, is listed on the New York Stock Exchange. Italy’s few unicorn-level ventures, such as Yoox and Depop, were snapped up by American buyers. Ambitious founders from Madrid and Milan now routinely pitch their Series B or Series C rounds in San Francisco, not at home.

The moment a European company shows real promise, off it goes to America.

How can Europe ever claim superpower status when its brightest talents bolt at the first opportunity?

That is the challenge Brussels ought to face.

Europe must invest in future-looking start-ups and innovative technology not weapons. We must invest in science, technology and the next generation of industries rather than indulge nostalgic visions of military grandeur.

Only once Europe confronts these obstacles and rebuilds its economic strength should it even consider competing with the United States and China on defence. Diverting money from social programmes and starving investment in innovation is the wrong answer at the wrong time.

Europe’s decline will not be reversed by more missiles or fleets of fighter jets. It will be reversed by unleashing growth, innovation and confidence in its own economic future. The real competition with America and China is not in weapons but in ideas, in the capacity to build the industries that will shape this century.

Until Europe faces up to that truth, no amount of military spending will restore its standing. We are not losing because European armies are weak. We are losing because European economies are tired.