AGORA

I. The Paradox

Europe is the world's largest single market. 450 million people. 14 trillion euros of economic output per year. The largest trading bloc on earth, exchanging more goods with every other continent than any other actor. The world's second most important reserve currency. The birthplace of modern banking, the stock exchange, the letter of credit.

And yet: Europe cannot protect its own companies from being fined by foreign governments for conducting business that is legal under European law. Europe cannot effectively threaten with economic countermeasures a state that is economically coercing it. And when the world splits into two rival financial systems, Europe sits between both — without its own infrastructure, without its own choice, without its own voice.

This is not fate. It is the result of decisions that were never taken.

II. The First Vulnerability: Foreign Law on Home Soil

In 2014, the French bank BNP Paribas paid 8.9 billion dollars in fines — to the US Justice Department. Not because it had broken American law. But because it had conducted business with Cuba, Iran and Sudan — countries on US sanctions lists. The transactions were entirely legal under European law. The EU had expressly imposed no corresponding sanctions. It made no difference. BNP Paribas had used US dollars in part of the transactions — and that placed it under US law. Full stop.

This is called extraterritoriality: a state's ability to enforce its law beyond its own borders. The United States does this consistently and effectively because it possesses two structural instruments: the dollar as the global transaction currency, and SWIFT as the global financial messaging system. Whoever uses dollars — and almost everyone does, in almost every significant transaction — enters US jurisdiction. Whoever communicates via SWIFT — likewise almost everyone — can be monitored by US authorities.

When the EU tried after Trump's 2018 withdrawal from the Iran nuclear deal to allow European companies to continue operating with Iran, it constructed INSTEX — a special vehicle intended to process transactions without dollars and without SWIFT. The experiment failed completely. No European bank was willing to handle the clearing. The liability risks vis-à-vis US courts were too great. INSTEX processed a single transaction in its entire existence — medical supplies worth just under one million euros. Then it disappeared.

The result: Europe has a legal system it cannot enforce, because the infrastructure on which law enforces itself is missing.

III. The Second Vulnerability: No Capacity for Deterrence

When Trump announced punitive tariffs on European goods in 2025 and the EU threatened to respond with the Anti-Coercion Instrument, the predictable happened: nothing. Von der Leyen flew to Scotland and negotiated an agreement that observers described as capitulation. The ACI — the instrument the EU had built in 2023 to counter economic coercion — was never activated.

Why not? The official answer was diplomacy. The more honest answer is structural: to effectively threaten a state with economic exclusion, you need control over the access gates. You must be able to interrupt payment flows, freeze accounts, block transactions — quickly, autonomously, without the adversary finding alternative routes.

The United States can do this. It has OFAC — the Office of Foreign Assets Control — an agency that can impose sanctions within 24 hours and immediately mobilises the entire US financial infrastructure for enforcement. Those sanctioned by OFAC lose access to dollar clearing, US correspondent banks and the US capital markets. That is real power.

Europe has no equivalent. Sanctions require unanimity or qualified majority in the Council, transposition into 27 national legal systems, and then the voluntary cooperation of banks. Even when agreement is reached, it takes weeks to months before a measure takes effect. In that time, the adversary has opportunity to find alternative routes — through third countries, alternative currencies, shell companies in jurisdictions that do not comply with EU measures.

A threat that nobody takes seriously is not a threat. It is an announcement of one's own weakness.

IV. The Third Vulnerability: The Pincer

The dollar system has acquired a rival. China has been building an alternative financial infrastructure for years: CIPS as a counterpart to SWIFT for yuan transactions, mBridge as a multilateral platform system for digital central bank currencies, the digital yuan as an instrument that enables cross-border payments without western intermediaries. After the freezing of Russian central bank reserves of 300 billion euros in 2022, countries worldwide — India, Saudi Arabia, Brazil, Turkey — began investing seriously in these alternatives. The dollar's share of global foreign exchange reserves has fallen from 72 percent in 1999 to below 59 percent. That is not collapse, but it is a shift.

For Europe, this means a pincer situation. On one side: a US system that undermines European sovereignty through extraterritoriality and is deployed as a geopolitical instrument against European interests — as the Iran case and the Trump tariffs demonstrate. On the other side: a Chinese alternative system that offers even less transparency, is even less democratically controlled, and would give China the same extraterritorial power over transactions that the US has today.

Europe cannot remain in the dollar system without continuing to be coercible. Europe cannot switch to the yuan system without replacing one dependency with another. And Europe has no system of its own.

That is the pincer. And it will tighten the further the two blocs diverge from each other. At the latest when — not if — a serious conflict between the US and China over Taiwan or trade escalates, Europe will be forced to take sides for every transaction: dollar or yuan, Washington or Beijing. A neutral position will no longer be technically possible if the infrastructures become incompatible.

V. What Already Exists — and Why It Is Not Enough

Europe is not starting from zero. It has a range of building blocks that have simply not yet been assembled into a system.

TARGET2 is the ECB's interbank clearing system — it processes transactions worth approximately 1.8 trillion euros per day. TIPS enables real-time euro payments around the clock. The SEPA system standardises transfers and direct debits in the euro area. The euro is the world's second most important reserve currency. And the ECB has been developing a digital euro since 2021 — a digital central bank currency whose future came up for decision in 2025.

Why is this not enough? Because these building blocks were conceived as technical infrastructure, not as geopolitical infrastructure. TARGET2 does not protect transactions from US secondary sanctions. The digital euro is so far conceived as a consumer instrument — not as an instrument for sovereign settlement in foreign trade. SEPA functions within Europe, but has no architecture for global payment transactions outside the dollar system.

The problem is not technical but political: nobody has yet taken the decision to assemble these building blocks into a sovereign financial system. Because it would mean openly declaring that Europe has its own interests, which it is willing to defend against its allies if necessary.

VI. AGORA — The Concept

AGORA stands for Autonomous Governance of Reserves and Accounts. The agora was the central public square of the Greek polis — marketplace, court and political assembly at once. A place open to all, but standing under its own law. That is the metaphor: a system open to all, but sovereignly administered.

AGORA is not an attack on the dollar and not a competitor to the yuan. It is Europe's own infrastructure — built not to shut others out, but so that Europe can no longer be shut out.

The concept has three levels that build on each other.

First level: Sovereign clearing. All transactions between European companies and between the EU and its trading partners must be processable through infrastructure that stands entirely under EU jurisdiction. No US server, no US parent company, no dollar denomination as a technical prerequisite. This means: expansion of TARGET2 and TIPS into a complete settlement system for euro foreign trade, data storage exclusively on European soil under European law, and — crucially — a European law that prohibits European financial institutions from complying with foreign extraterritoriality claims without an express EU Council decision. BNP Paribas was permitted to pay 8.9 billion dollars because no European law protected it. AGORA changes that.

Second level: Autonomous sanctions capacity. Europe needs an equivalent to OFAC — a European agency that can act autonomously and quickly within the framework of the Anti-Coercion Instrument. Not with 27 national ratification procedures, but with predefined packages of measures that enter into force automatically upon activation — as with NUET, as with RIEGEL. The political decision is taken in advance: whoever coerces Europe economically triggers an automatism that no subsequent diplomacy can stop. That is deterrence — not rhetoric. And deterrence only works when it is credible. It is only credible when the infrastructure is in place to enforce it.

Third level: Bridge architecture. This is the most unconventional part — and the most important. Europe should not build a closed system that seals itself off from the rest of the world. It should build a system that deliberately communicates with both rival infrastructures without being controlled by either. Technically, this is possible: the international standard ISO 20022 for financial messages was conceived to connect different systems. A European system built on this standard and simultaneously interoperable with both SWIFT/dollar and CIPS/yuan could make Europe the indispensable bridge — the actor without whom global trade between the blocs does not function.

This sounds like a technical detail. It is a geopolitical revolution. Whoever is the bridge determines the toll. Whoever cannot pass without using European infrastructure cannot ignore Europe. Europe will no longer be sitting between the chairs — it will be the table.

VII. The Digital Euro as Key

The digital euro being developed by the ECB is in its current conception a consumer instrument. Citizens should be able to pay with it like cash, only digitally. That is useful — but it is not AGORA.

AGORA requires a digital euro that also functions as a wholesale instrument: for the settlement of foreign trade transactions between companies, for settlement between central banks, for the settlement of commodity transactions currently denominated in dollars. Oil, gas, metals, agricultural goods — everything is traded in dollars not because the dollar is the best currency, but because there is no alternative. A fully functional digital euro capable of processing wholesale transactions whose infrastructure stands under European jurisdiction would be that alternative.

This is the key to the bridge architecture. Countries of the Global South that want to be dependent neither on US sanctions nor to enter a Chinese system would welcome a European alternative. India, Brazil, the ASEAN states, Africa — all are looking for options. Europe has the currency, the scale, the legal stability and the geopolitical credibility to offer this option. What is missing is only the infrastructure.

VIII. What AGORA Is Not

AGORA is not a declaration of war on the United States. It is not a departure from the transatlantic partnership, no repudiation of NATO, no anti-American gesture. It is the answer to a simple question: should Europe be able to represent its own economic interests, or not?

An ally that can sanction its allies — and does — compels Europe to capability. Not out of hostility, but out of reason. A partnership between unequals, in which one can at any moment economically paralyse the other, is not a real partnership. AGORA creates the precondition for a partnership of equals.

AGORA is also not a panacea. It does not resolve the problem of European sovereign debt, nor the fragmentation of capital markets, nor the question of eurobonds. These problems are real and must be solved separately. AGORA is the infrastructure — the road on which the economy can then travel. Without the road, the best goods are useless.

IX. The Political Precondition

AGORA does not fail on technology. The technology exists. It fails on a political decision that nobody has yet been willing to take: Europe declares that it has its own interests, which it will defend against its allies if necessary.

That is the sentence no European politician has yet been willing to say. Because it would mean disturbing transatlantic harmony. Because it would mean not provoking China. Because it would mean taking responsibility.

But the alternative is clear: Europe remains the weakest link in a financial architecture designed by others according to their interests. It pays the fines others impose. It follows the sanctions others enact. It sits between two systems without having one of its own.

Friedrich Merz spoke at the Munich Security Conference 2026 about defence spending. He should have spoken about AGORA. Because Europe's greatest security gap is not the missing armoured brigade. It is the missing capacity to protect its own economy — and to enforce its own interests.

Europe is the world's largest market.
It is time it acted like one.

X. What Must Be Done

First: The ECB receives the mandate to develop the digital euro not only as a consumer instrument but as a complete wholesale settlement system — for foreign trade finance, commodity markets, interbank clearing. The technical infrastructure shall stand entirely on European soil, under European law, without dependency on US or Chinese cloud providers.

Second: The EU enacts a Blocking Statute with real teeth. The existing Blocking Statute of 1996 theoretically prohibits European companies from complying with foreign extraterritoriality claims. In practice it is ineffective, because European courts have no means of protecting companies from US penalties. The new instrument must create a European liability for companies that circumvent European law under US pressure — and a European compensation fund for companies that pay US penalties because they complied with European law.

Third: A European sanctions agency modelled on OFAC — with predefined packages of measures that enter into force automatically upon activation by the Council, without further national ratification. The packages are agreed in advance: whoever coerces Europe at level 1 receives measures package A. Level 2, package B. No hesitation, no debate, no waiting.

Fourth: Europe invests in bridge architecture. ISO-20022-compatible interfaces to the Chinese CIPS infrastructure are developed — not to use CIPS, but to enable European companies to transact with CIPS users without themselves entering the Chinese system. Europe becomes the translator, the intermediary, the indispensable hub.

Fifth: The EU conducts active talks with India, Brazil, the ASEAN group and African regional blocs on the use of the digital euro as a third-country currency for bilateral trade finance. Not as a replacement for the dollar, but as an alternative for transactions where both sides do not want US extraterritoriality.