'Nixon Shock' and Why EU Chief Ursula Von der Leyen Says Europe Must Go Its Own Way in Davos | Explained

Key Highlights

• EU officials are weighing retaliatory tariffs worth up to €93 billion, and some member states are urging use of the bloc’s anti-coercion tool, often dubbed the EU’s “trade bazooka.”Overnight, tensions were further inflamed after Trump posted what he said were private messages from Mark Rutte and French President Emmanuel Macron on social media. Invoking the 1971 decision by former US President Richard Nixon to abandon the dollar’s gold convertibility, von der Leyen said Europe is again facing a moment of abrupt unilateral change by Washington, with global consequences. She said the EU is preparing a major investment package to support Greenland’s local economy and infrastructure, while also strengthening security ties with non-U. S.
• partners such as the United Kingdom, Canada, Norway and Iceland. Related NewsMacron’s Red Eye Goes Viral: French Prez Quips ‘Eye of the Tiger’ After Redness Raises Questions The crisis, she added, is forcing Europe to rethink its security strategy, including in the Arctic, based on the principle that sovereign peoples decide their own future.
• Pushing Europe into confrontation, she warned, risks benefiting Russia and China.“The world has changed permanently,” von der Leyen said.
• “And Europe must change with it.” The 'Nixon Shock' ExplainedThe “Nixon shock” refers to a series of sudden economic decisions announced by US President Richard Nixon on August 15, 1971, that upended the global financial system and shocked America’s allies. At the time, the world operated under the Bretton Woods system, which fixed foreign currencies to the US dollar, while the dollar itself was tied to gold at a rate of $35 per ounce.
• By the late 1960s, heavy U. S.